The build out, the last leg of which was approved Nov. 10 by the Public Service Commission of Wisconsin, will see capital requirements of $6.3 billion between 2003-08. West says the debt component will amount to $600 million. The lion's share of the funding--$5 billion--will come from internal sources and the balance will be made up by issuing equity and through asset sales, he adds.
The company's expansion project--dubbed Power The Future--consists of building two 545 MW natural gas-fueled units at its Port Washington facility and two 615 MW coal-fueled base-load plants at its Oak Creek plant. The debt portion of the gas facility construction costs can probably be met through commercial paper, West notes, but the more expensive coal units will require loan funding.
The first unit to come on line will be the phase one of Port Washingtonin 2005 and the last will be the second unit at Oak Creekin 2010. Once construction is wrapped, longer-term financing via the bond market will be put in place, West says. "Once we do take out the financing, the debt will be tied to the specific plants."
West declined to name the banks it is talking to about the loan funding, but the indications are that there will be interest among lenders. JP Morgan Chaseleads the company's corporate level commercial paper loan facility.
Under the Public Service Commission ruling, subsidiary We Powersubsidiary will construct and own the new facilities and utility Wisconsin Electric Powerwill lease and operate the plants.