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Each company will have an ownership stake of 8.33% in the projects, for which construction commenced a few months ago. With a total price tag of $US2.3 billion, MG&E said its own capital costs would come in at $US190 million - $US22 million as an initial payment, with additional capital to be paid in the next five years.

WPPI president Roy Thilly was confident in the company’s decision, telling local media the plants were “[the] best choice for long-term stability. This project gives us an opportunity to achieve the economies of scale through ownership of portions of large baseload power plants, and will help WPPI maintain competitive and stable rates for the long term.”

Costs associated with WPPI’s stake will total $US239 million, including $US34 million in interest costs, according to company spokesperson Neil Palmer.

Each of the WE coal plants, slated for completion in 2009 or 2010, are estimated to generate 615MW, enough to provide electricity to approximately 300,000 homes. WPPI and MG&E will each purchase 50MW of power from each plant.