Coal

NRG, EnBW to bid for east German utility Veag

Oct. 4, 2000—In yet another twist in the evolution of the German power market, independent power producer NRG Energy Inc., Minneapolis, and German energy firm EnBW Energie Baden-Wurttemberg AG (EnBW) will jointly bid for control of Vereinigte Energiewerke AG (Veag), east Germany’s biggest power producer, the companies reported Wednesday.

Germany’s E.ON and the merging RWE and VEW have to sell their stakes in Veag for antitrust reasons by Dec. 13. Multiutility giant RWE is acquiring VEW in a deal worth some $20 billion.

According to published reports, Atlanta-based Southern Co. had hoped to use its 26% stake in Bewag, another German power company, as a springboard into the east German market and control of Veag.

NRG Chairman David H. Peterson and Klaus J Kasper, an EnBW board member, declined to give any details of the planned bid being made to the current Veag majority owners. They said the time period for making the bids, open until Nov. 15, 2000, is enough for the offer to be worked out.

Peterson and Kasper said they want to maintain VEAG as an independent company and welcome discussions with municipal utilities, as well as other companies, regarding their possible participation in Veag’s future.

NRG and EnBW said they do not expect any antitrust obstacles because NRG does not have any competing interests in, or obligations to, other competitors in Germany. They reported the concept expressly provides for Veag to operate independently of EnBW and for the headquarters to remain in Berlin.

NRG and EnBW came together because of the “ideally complementary competencies of the two companies,” they said in a news release.

The brown coal companies Laubag and Mibrag, in which NRG has a 33% interest, are essential components of NRG and EnBW’s Veag concept, they said. NRG has expertise mining brown coal, not only through its ownership in Mibrag, but also through part ownership in the largest brown coal mining operation in Australia.

NRG also owns a portion of Schkopau, a 960 Mw plant supplied with MIBRAG brown coal.

In 1993 NRG founded the first consortium to successfully acquire and privatize coal mining and generation assets in the new German federal states.

NRG owns all or a portion of 63 power generation projects and its net ownership interest in these projects exceeds 16,300 Mw.