PSEG Power is expanding its base into Maryland.
The Newark subsidiary of Public Service Enterprise Group announced that it has acquired a 755-megawatt natural-gas-fired project in Prince George County from Genesis Power LLC and Ares EIF Management, an energy-focused private equity fund.
PSEG Power will invest between $825 million and $875 million in the project, which is expected to begin construction sometime this year and to start supplying capacity to the regional power grid in 2018.
The company is by far the largest power producer in New Jersey, and a big player in the PJM Interconnection, the nation’s largest power grid. Like many of PSEG Power’s units in New Jersey, the Maryland plant is located in a region where the grid is heavily congested -- a problem that makes the facilities more profitable, but also makes power more costly to businesses and residents, according to analysts.
The project also was bid in and cleared an auction in May 2014 held by PJM, which enables it to provide needed capacity to keep the lights on and energy flowing. Capacity payments have become an increasingly lucrative source of revenue for power generators.
“It shows their commitment to PJM and their confidence in the market,’’ said Paul Patterson, an energy analyst with Glenrock Associates in New York.
“The new plant offers a strong operational fit for PSEG Power’s balanced-generation portfolio and will expand our footprint in our core PJM market,’’ said Bill Levis, president of PSEG Power. “This is an opportunity to add to the reliability of the energy, provide clean energy to Maryland, and create new jobs and economic activity locally and within the region.
According to the company, the plant will generate about 700 jobs during the two-year construction phase and more than 20 permanent jobs once the plant becomes operational. It will feature two gas-fired turbines and one steam turbine.
PSEG Power plans to rename the facility PSEG Keys Energy Center.