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News Digest

Fortnightly Magazine - January 1 2000

seek a rate increase in Idaho effective prior to 2002, and to pay a $6.4 million merger credit to customers.

"Denial of the merger in this case simply by virtue of the fact that ScottishPower is incorporated in another country would put this commission on very tenuous legal footing," the PUC said. But dissenting commission president Dennis Hansen argued that the companies failed to provide adequate evidence that the merger met the public interest. Order No. 28213, Nov. 15, 1999 (Idaho P.U.C.).

Dominion Resources + CNG. The Federal Energy Regulatory Commission conditionally approved the merger of Dominion Resources Inc. and Consolidated Natural Gas Co., giving the companies 45 days to revise their analysis of market power under the commission's competitive screen and thus allow the FERC to build a record and approve the deal without further conditions.

In the alternative, the applicants could accept a code of conduct for dealings among affiliates of the new post-merger corporate family.

Though he did not dissent, Commissioner Curt Hébert said he disagreed with the majority's findings on vertical market power. He said the agency essentially was "sending a glorified deficiency letter," thereby demonstrating that it "should leave the merger arena." Docket No. EC99-81-000, Nov. 10, 1999 (F.E.R.C.).

Illinova + Dynegy. The FERC approved the merger of Illinova Corp., parent company of Illinois Power, and energy marketer Dynegy Inc. The newly formed holding company will operate from Dynegy's headquarters in Houston. Docket No. EC99-99-000, Nov. 10, 1999 (F.E.R.C.).

Enron + Portland General. Having shifted its focus away from retail to wholesale, Enron Corp. on Nov. 8 announced it will sell its Portland General Electric subsidiary to Sierra Pacific Resources for cash and debt worth $3.1 billion - the same figure it paid two years ago to acquire PGE. With timely receipt of regulatory approvals, Enron would expect to close the selloff in the second half of this year.

"Portland General is one of the premier electric utilities in the West," said Michael Niggli, chairman and CEO of Sierra Pacific Resources. "This transaction is an important step in fulfilling our previously stated goal of expanding our regulated utility businesses."

AEP + C&SW. On Nov. 5 the Texas PUC unanimously approved the merger of American Electric Power and Central & South West Corp., along with combined rate cuts totaling $221 million over six years for Texas retail customers of the three C&SW Texas operating companies. The settlement provides for divestiture of 1,064 megawatts of generating capacity in Texas.

A FERC law judge was to rule on the merger by Nov. 24, with a final commission order expected by March. The deal had already won approval in Arkansas, Louisiana and Oklahoma.

KeySpan + Eastern Enterprises. New York-based KeySpan Corp. on Nov. 4 announced that it will acquire New England-based Eastern Enterprises for $64 per share, or $2.5 billion ($1.7 billion in equity and $0.8 billion in assumed debt and preferred stock).

The combined companies will serve 2.4 million electric and natural gas customers. KeySpan expects pre-tax annual merger savings of about $30 million. KeySpan's headquarters will remain in New