Hydroelectric, Renewables

Divestiture & Acquisition Roundup

Issue 7 and Volume 102.

Divestiture & Acquisition Roundup

News Update

By Ann Chambers,

Associate Editor

The unprecedented flurry of generation asset divestiture and acquisition is continuing through the summer, as it becomes increasingly difficult to keep track of the buyers and sellers. Here`s a quick rundown of notable recent announcements.

PG&E Slates Hydro Auction

Pacific Gas & Electric is planning to sell its 68 hydroelectric facilities and its two fossil units at Humboldt Bay. Valuation and auction protocols were not yet established at press time. The book value for the 3,889 MW of hydroelectric generation is $1.6 billion. It has not been determined whether the hydroelectric plants will be sold as one package or in several smaller packages.

One wrinkle in the sale plans is the fossil plant siting. The two fossil units share a site with the Humboldt Bay nuclear plant and its spent fuel. The nuclear plant is closed but radioactive.

PG&E is expected to fill in some of the sale details by late summer. If the projected sales are completed, it will leave PG&E with only Diablo Canyon as a generating site.

Southern Co. Buys NE Power Plants

Southern Co. has agreed to purchase electric generating assets in New England from subsidiaries of Commonwealth Energy System and Eastern Utilities Associates for $537 million.

The plants, with a combined generating capacity of approximately 1,260 MW, use natural gas and oil as primary fuels. The sale is part of the restructuring of the electric utility industry in New England. Southern Energy will own and operate the plants, while Southern Company Energy Marketing will sell the output to divesting utilities and the open market.

Commonwealth Energy is selling Canal Unit 1 and a half-interest in Canal Unit 2, five diesel generators in Massachusetts, Kendall Station in Massachusetts, and a 1.4 percent interest in Wyman Unit 4 in Maine. Eastern Utilities is selling its half-interest in Canal Unit 2.

UI Selling Fossil Units

United Illuminating (UI) is planning to sell its three fossil power plants under Connecticut`s electric restructuring law, which requires the state`s utilities to submit plans by Oct. 1 for divesting generation assets. The 1998 book value of the assets is $116 billion, with an estimated market value of $170 billion.

The fossil plants for sale are: the 667 MW Bridgeport Harbor Station with three oil-fired and one oil- and coal-fired unit, the 466 MW New Haven Harbor Station with one oil- and gas-fired unit, and the 75 MW English Station with two oil-fired units. Also for sale are a 66 MW share with Hydro-Quebec and 63 MW of purchased power contracts from the Bridgeport Trash-to-Energy Plant, the Shelton Methane Gas Landfill and the Derby Hydroelectric plant.

Bits and Briefs

GPU Inc. expects talks with a potential buyer for two of its nuclear plants–Oyster Creek in New Jersey and Three Mile Island in Pennsylvania–to be concluded in early July.

Community Energy Alternatives has sold its 50 percent interest in two Long Island cogeneration plants to the Eastern Group. Both plants were developed jointly with Brooklyn Union, which sold its interest to Calpine Corp.

Cinergy Corp. is looking to sell or swap some of its generating facilities in Indiana, Ohio and Kentucky.

AES Corp. has completed its purchase of three Southern California Edison generating stations for approximately $781 million. AES now owns AES Redondo Beach, AES Huntington Beach and AES Alamitos, with a peak capacity of 3,956 MW. Williams will supply fuel to and market the power from the three plants.

Sithe Energies is purchasing Boston Edison Co.`s 12 generating units for $657 million. The units can produce 2,000 MW.

Calpine has announced a memorandum of understanding to purchase Sacramento Municipal Utility District`s 72 MW geothermal power plant for $13 million. p