Last week, CPS Energy allowed our agreement with Summit Power Group — for the purchase of 200 MW of electricity from the Texas Clean Energy Project — to expire.
We signed the 25-year purchase power agreement (PPA) back in 2011, excited about the project that looks to develop a first-of-its-kind clean coal power plant that captures 90 percent of its carbon dioxide (CO2) to use for enhanced oil recovery in West Texas.
Since 2011, the team at Summit has worked diligently to secure financing and begin construction. CPS Energy extended Summit’s deadlines for milestones three times, understanding that power plant construction does not always follow a precise timeline.
The project has continued to experience delays, however, and the energy landscape has changed.
With abundant supplies of natural gas below our feet and prices for natural gas remaining moderate, the economics of energy produced from coal generation with carbon-capture have changed. The prudent option was to allow our agreement with Summit to end, while we consider the possibility of an updated PPA with the Texas Clean Energy Project in the future.
This change will not affect our planning for future generation resources. We have and will continue to pursue the course that is best for our customers: further diversifying our electric generation fleet with no- and low-carbon resources and pursuing technology that helps customers manage their energy use.
We remain hopeful this project can proceed and that carbon-capture technology will become feasible for existing coal plants.