NEW POWER PLANT PROPOSED FOR AREA

A new 250 megawatt power generation plant is planned for Southeast Missouri.

PanEnergy Corp of Houston, Tex., and Associated Electric Cooperative Inc., (AECI) headquartered in Springfield, Mo., have reached an agreement to develop a partnership which would share the cost of a proposed gas-fired combined cycle power generation plant, in a location to be announced later.

The two companies would jointly market the plant's production.

"The project is slated to be located on Associated's transmission system in Southeast Missouri," said John P. Burnett, of PanEnergy media relations.

Associated Electric includes a power facility near New Madrid.

"We don't the exact location of the proposed new plant," said Max Cates, of AECI. "But it should be near the AECI facility.

AECI's extensive transmission system is directly interconnected with 21 Midwest utilities which are located in four of the nation's 10 electric reliability councils.

Natural gas transmission to the new plant will be provided by Texas Eastern Transmission Corporation, a wholly-owned subsidiary of Pan Energy Corp. Fuel management will be provided by Pan Energy Trading and Market Services, LLC., a PanEnergy and Mobile Corporation company.

AECI, an electric power wholesaler, is owned by and provides power to six regional generation and transmission cooperatives. These cooperatives in turn supply power to 40 Missouri and three Southeast Iowa distribution cooperatives which serve more than 1.2 million consumers.

Although a starting construction date has not been established, officials from both companies expects the new plant to be operative in 1999.

AECI will reserve 125 megawatts of the plant's capacity to meet its future capacity needs. The partners plan to sell the project's other 125 megawatts of capacity in the open market.

PanEnergy, one of North America's leading energy services company, operates more than 37,000 miles of natural gas pipelines, delivering gas primarily to Northeast and Midwest markets.

Through PanEnergy's recent venture with Mobil, it is one of the leading marketers of natural gas and electricity in North America, and has other energy interests worldwide.

The plant was specifically sited to take advantage of the fact that the Federal Energy Regulatory Commission recently adopted a rule to turn the U.S. electric transmission system into an open access system for buyers and sellers of wholesale electricity.