Sithe Awards $1.2-Billion Contract

Wed May 10, 2000
Walt Heithaus

In January, Sithe Energies Inc. awarded a $1.2- billion contract for the construction of two new power-generating facilities in New England to Raytheon Engineers and Constructors (RE&C), a unit of Raytheon Company.

The two facilities, which will have a total generating capacity of 2,400 MW, are: Mystic Station, a 1,600 MW gas-fired power plant, located in Everett, MA, the largest power generating plant in New England; and Fore River Station, an 800 MW gas-fired power plant, situated in Weymouth, MA, near Boston’s south shore.

On April 17, Raytheon Company announced it has agreed to sell its RE&C unit to Idaho-based Morrison Knudsen Corp., which had revenues of about $2.25 billion last year. The company, best known in New England for its work on the Third Harbor Tunnel portion of the Central Artery/Tunnel (CA/T, or “Big Dig") in Boston, said the deal will help it compete against other construction-industry giants.

Asked if the sale of RE&C to Morrison Knudsen will have any impact on the two new power generating facilities, a Raytheon spokesman said it will be “business as usual.”

Work on the two facilities began in the first quarter of 2000 and is expected to be completed in 2002. Both facilities will operate as “merchant plants,” meaning that the electricity will be sold on the open market.

Raytheon will be the turnkey contractor for both projects, providing complete project management, engineering, equipment procurement, construction and start-up services.

“In the new competitive power markets, critical mass and location are keys to said,” said Sithe’s chairman and CEO William Kriegel. “This is an exciting project for Sithe because it further enhances the scope and sale of our generating facilities in the Northeast.”

Founded in 1984 and based in New York City, Sithe is among the leading independent power companies in the world with a broad portfolio of over 28,000 MW in operation, under construction, or in active development.

“The Mystic and Fore River Station plants are particularly important because, when combined with our existing plants in the area, Sithe is uniquely positioned as the cleanest and lowest-cost power generator in Boston and New England,” Kriegel said.

Mitsubishi Heavy Industries (MHI) will provide its newest generation gas turbine, the M501G series, for both facilities, as well as the steam-turbine generators. Fueled by natural gas, the new plants will be among the cleanest burning in New England. MHI’s new “G series” is reported to be the most efficient gas turbine on the market.

The two projects, which will proceed in parallel, will employ more than 1,000 union craft workers at peak construction periods.

Both of the new plants will employ combined-cycle technology. The power islands will be constructed in 800-megawatt blocks, with each block consisting of two gas turbines, two heat recovery steam generators and one steam turbine.