From the Houston Chronicle's "Fuel Fix"

CPS Energy will know by the end of the year whether it will be successful in acquiring an existing natural-gas plant that would largely replace two old coal-fired plants set to be retired by 2018, executives said Thursday.

Once CPS Energy obtains a natural-gas plant, the utility will seek to buy natural gas produced by the Eagle Ford shale operations in South Texas, said Doyle Beneby, CPS Energy president and CEO.

The city-owned utility will place its bid in the coming weeks for an undisclosed natural-gas plant that is near San Antonio with a generation capacity of 800 megawatts. The buyer will be determined in December, and the sale likely will close in the first quarter, said Cris Eugster, CPS Energy chief sustainability officer.Eight hundred megawatts from a natural-gas plant is enough to power about 200,000 houses, Eugster said.

A natural-gas plant acquisition is part of the utility’s policy to reduce use of carbon-emitting fuels, Beneby told several hundred people attending the Forum on Entrepreneurship breakfast event held by St. Mary’s University’s Bill Greehey School of Business.

“We’ll be in the market for natural gas, and what better place than sitting on top of the Eagle Ford?” Beneby asked.

“Instead of shipping coal from Wyoming, we will be buying gas from locals,” Beneby added.

Shutting down the Deely coal units by 2018 means less particulate emissions, he said.

Eugster said after Beneby’s presentation that natural gas-fired electricity plants use one-third the water of coal-fired plants and emit about half the greenhouse gases of coal plants.

The utility currently is in the midst of collecting bids, for the third time, on a proposed 400-megawatt solar project. Bidding began Monday and concludes Dec. 7. Earlier bidding rounds were scrapped because late bids came in reflecting quickly falling solar equipment prices. Four hundred megawatts from a solar energy project is enough to power 80,000 homes.

CPS Energy added new minimum requirements for bids, including creating at least 800 jobs, establishing a $30 million annual payroll and making $100 million in manufacturing capital investments. The utility staged an online bidders’ conference today to assist companies planning to submit bids.

Beneby said that even though CPS Energy’s possible investment in the expansion of the South Texas Project nuclear plant in Matagorda County is on hold, Beneby said he’s hoping for additional nuclear power long-term.

The 1979 Three Mile Island incident set back the U.S. nuclear industry about 25 years, and Japan’s tsunami-related nuclear plant damage this year will set back the industry another three to four years, Beneby said. The nuclear industry still must solve the problems of used radioactive fuel, he said.

If the U.S. military disarms some of its plutonium-based weapons arsenal, some of that material might be mixed with uranium to provide new domestic-source fuel for nuclear plants, he added.