IT TAKES LABOR, FUEL, OPERATING CASH AND INVESTMENT capital to produce and deliver electric power. Which utilities have managed to use these resources optimally to produce and sell kilowatt-hours...
POWER PLANT SALE. Central Maine Power Co. has agreed to
sell its hydroelectric, fossil and biomass power plants totaling 1,185-MW of generating capacity to FPL Group, the holding company of Florida Power and Light. The sale price of $846 million exceeds book value and could permit up to a 10-percent rate cut for customers by the end of the year.
OHIO/TEXAS DEAL. Ohio-based American Electric Power
Co. and Texas-based Central and South West Corp. on Dec. 22 announced that they have entered an agreement to merge, creating a company with a total market capitalization of about $28.1 billion. The companies anticipate merger-related savings of about $2 billion over a ten-year period but estimated 1,300 out of a total of 25,000 domestic jobs will be lost.
CAJUN BANKRUPTCY. Entergy Gulf States has acquired the
30-percent share of the River Bend nuclear power plant formerly owned by Cajun Electric Power Cooperative Inc. Entergy now has 100-percent ownership of the plant. The acquisition was part of a larger agreement ending a series of disputes between the two companies that spawned litigation for eight years. Entergy Gulf States took title to Cajun's interest in River Bend from Cajun's trustee in bankruptcy, Ralph R. Mabey, at the direction of the Rural Utilities Service, formerly the Rural Electrification Administration, the major secured creditor in Cajun's ongoing bankruptcy case.
PLANS TERMINATED. Baltimore Gas and Electric Co. and
Potomac Electric Power Co. have terminated plans to merge to form a new company, Constellation Energy Corp. The two companies cited financial conditions imposed by the District of Columbia and Maryland commissions as reason to cancel their plans. "We have tried unsuccessfully to obtain reconsideration of these conditions," said BGE's Chairman and CEO Christian H. Poindexter and PEPCO's President and CEO John M. Derrick Jr. "But [we] now conclude that a favorable outcome cannot be expected within a reasonable period, if at all." The proposed merger also was plagued by lawsuits filed by union workers.
Power Pools & ISOs
NEW YORK POWER POOL. The New York Power Pool on
Dec. 19 filed supplemental information on plans by member systems to create an independent system operator. It has asked the FERC for approval by March 31, 1998, to allow the ISO to become operational by June 30, 1998. The proposal calls for use of locational-based marginal pricing for both electricity sold in the competitive spot market and for transmission service.
SOUTHWEST POWER POOL. The Southwest Power Pool on
Dec. 19, 1997 filed at the FERC its open-access electric transmission tariff, which would allow one-stop shopping for short-term firm and nonfirm point-to-point transmission service across seven southwestern states. If approved, the tariff would become effective in April, and would partly supersede present tariffs on file by member utilities. The tariff provides for rates designed on a distance-based "megawatt-mile" method, which establishes a link between the reservation, scheduling and compensation for transmission service and the anticipated impact of such service on the transmission system. In so doing, the megawatt-mile method replaces the present contract-path method and addresses rights to available transfer capability of the interconnected