The City of San Marcos in US is planning to buy a stake in a new 540MW gas-fired power station under construction in the Horseshoe Bay city in Texas.

Lower Colorado River Authority is building the natural gas-fired plant, which will replace the 37-year old Ferguson Power Plant near Lake Lyndon B Johnson.

The old 420MW generating station will be decommissioned when the new one is fired up sometime next year, reports

The City of San Marcos is reportedly paying nearly $18m for its share of the $500m power project.

Mayor Daniel Guerrero was quoted by the website as saying that the city’s share in the power plant will benefit its retail electric distribution system and ratepayers.

"The project will help us maintain stable and competitively priced power costs over the long term," Guerrero added.

The combined-cycle plant will use a gas turbine system and a steam-cycle system to generate electricity.

It is believed that a combined-cycle power station uses about 35% less fuel than a traditional natural gas-fired power plant.