Gas Capacity Rights. The New York PSC told retail suppliers that to serve firm retail gas load they must have rights to firm, non-recallable, primary delivery point pipeline...
turning out, there's not regulatory risk.
"The cash exodus of utilities from the generating portion of the business is clearly a 'credit positive' event. We're actually calling for net upgrades."
Like Sabatelle, he says auctions have prompted credit rating agencies to allow more debt-to-capital and less cash flow protection.
Scotto says he sees utility bonds continuing to be paid off through auctions and credit ratings heading up. "It's really that simple." F
Joseph F. Schuler Jr. is senior associate editor at Public Utilities Fortnightly.
Going Once, Going Twice¼ Sold!
Power plant auctions in the works.
NEW ENGLAND ELECTRIC SYSTEM should complete this year a $1.59 billion deal announced last August with U.S.
Generating Co., a PG&E Corp. subsidiary. USGen beat 25 bidders for 18 fossil and hydro plants and 1,100 megawatts of power purchase contracts, more than 5,000 MW in all. Book value: $1.1 billion.
SOUTHERN CALIFORNIA EDISON sold 10 gas-fired plants, 7,532 MW of combined power, on Nov. 24, for $1.1 billion (em 2.65 times above the $421 million book value. Four buyers (em AES Corp., Houston Industries Power Generation, NRG Energy Inc./Destec Energy Inc. and Thermo Ecotek Corp. (em beat out 40 bidders.
NIAGARA MOHAWK POWER CORP. plans to auction its fossil fuel and hydroelectric generating plants as part of its competition plan, PowerChoice. The divestiture scheme proposes a schedule for offers to be accepted as early as April. Winning bids would be announced mid-1998. The utility's 72 hydroelectric plants will be auctioned in two packages.
NORTHEAST UTILITIES will auction its non-nuclear generation in Massachusetts as the state opens to competition. It may form an affiliate to bid on the plants. NU has 1,500 MW of generating assets in the state. It hasn't decided whether to auction its New Hampshire generation as part of a restructuring plan there.
PACIFIC GAS & ELECTRIC sold three generating plants Nov. 18 to Duke Energy Power Services Inc. for $501 million. The plants' capacity: 2,645 MW. CPUC approval was expected before last month. A closing was set before March 31. Book value: $380 million. PG&E's second auction of its remaining fossil fuel and geothermal power plants will be held this year. These assets have a generating capacity of 4,718 MW. Book value: $750 million.
BOSTON EDISON will sell its non-nuclear generation, 12 oil and gas-fired plants, for $536 million to Sithe Energies Inc. That's $86 million more than book value. A closing was set for early 1998.
SAN DIEGO GAS & ELECTRIC'S auction will be held mid-year, with closing expected by year end. Some 2,400 MW of generation assets and long-term power contracts will go up to bid. Included, too, will be a 20 percent interest in the San Onofre Nuclear Generating Station. It will be the first nuclear asset auctioned, and a "non-operator" asset at that. Book value for the fossil generation is $250 million, with SONGS valued at $650 million.
UNITIL CORP./FITCHBURG GAS AND ELECTRIC LIGHT CO. expect to have a short list of bidders by March 30 on about 24 MW in joint-owned generating assets, 38 MW in purchased power agreements