Hunt Power, part of a consolidation of companies that includes Hunt Oil Co., said it plans to construct the 345-megawatt natural gas-fired plant near Crossfield, 50 kilometres north of Calgary.

The announcement comes at a time when power companies around North America are shelving or scrapping plans for hundreds of new generators because of sagging markets.

Electricity prices in Alberta, which hit record heights of $133 per megawatt-hour on average in 2000, have fallen to less than $40 so far this year. (A megawatt is enough to supply 1,000 average size homes).

In announcing the plant, Hunt officials said the company is focused on the future growth of the Alberta electricity market, rather than the present depression in prices.

"Alberta is a growing province, especially around the Calgary area, where there has been strong growth in electricity demand," said Jim Rix, project manager for Hunt Power.

"The price that's in the market today is not what we've based this decision on."

The proposed plant, which is to be completed by the end of 2005, is one of three major generators that could be built in the Calgary area.

AES Corp. is in the early stages of a 525-MW gas-fired plant on the eastern outskirts of the city, while Calpine Corp. has proposed a 250-MW gas-fired plant for the Calgary area.

By locating its plant in southern Alberta, Hunt Power will avoid some of the transmission problems Alberta has been faced with as its aging electric grid struggles to keep pace with the province's growth.

Most of the rise in power demand, or load, in Alberta has occurred south of Red Deer in the past decade, while the bulk of the province's generation capacity is located near Edmonton.

As a result, transmission lines running between Edmonton and Calgary are in need of a multibillion-dollar expansion, according to ESBI Ltd., the grid administrator.

"In the south, there's generally much more load than there is generation," said Neil Brausen, manager of long-term transmission planning for ESBI.

"The Hunt plant should be able to connect into the existing facilities without any problems. It would certainly alleviate some of the concerns we have over transmission (from the north)," Brausen said.

Unlike a few years ago when Alberta faced a razor-thin surplus of electricity, the province's power supply is now

15 to 20 per cent above its peak demand, a margin analysts consider healthy.

Demand for electricity, which dropped in early 2001 in response to higher power prices, has grown by more than four per cent in the past year, according to the Alberta Power Pool.

"Industrial demand is leading the growth in that area," said Wayne St. Amour, spokesman for power pool.

Information on the Hunt proposal was mailed out to Crossfield-area residents Thursday.

The project's first hurdle is a public consultation process, a regulatory step that slowed the construction of the AES plant when nearby residents raised concerns over the generator's proximity to homes.

Hunt said its generator is to be built on a 60-hectare plot of land, which will keep it away from residential areas. As well, the construction will result in roughly $100 million being spent in the Crossfield area, Rix said.

Electricity in Alberta

Power Generating Capacity: 11,590 megawatts (MW) including imports. One MW can supply 1,000 average-sized homes.

Peak Power Demand: 7,934 MW in 2001.

Expansion: 5,000 MW could be added between 2003-06.

Power Source: Coal produces more than half of Alberta's

electricity; natural gas, one-third; and the remainder is split

between hydro, wind and biomass.