News Digest

Fortnightly Magazine - February 15 2000
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Mergers & Acquisitions

NSP + New Century. The Federal Energy Regulatory Commission OK'd the merger of Northern States Power Co. (NSP) and New Century Energies Inc. (NCE), to form Xcel Energy Inc., on condition that the new company would join the Midwest Independent System Operator. FERC Docket No. EC99-101- 000, Jan. 12, 2000, 90 FERC ¶61,020.

* Rate Pancaking. The FERC found no problem with transmission rate pancaking with the MISO condition, even though NCE subsidiary Southwestern Public Service Co. (SPS) belongs to the rival Southwest Power Pool. It explained that since SPS does not now offer grid service in SPS through a regional tariff, any SPS transmission customers "already pay two transmission rates."

* MISO Connection. The parties also acknowledged that SPS is not physically connected with any MISO company, but felt that MISO soon would gain more members, so that SPS should be able to link up by the time MISO becomes fully operational. If not, SPS would link to MISO through Ameren by purchasing 200 megawatts of line capacity through Public Service Co. of Oklahoma.

* Oklahoma Consent. On Jan. 10, the Oklahoma attorney general and the staff of the state PUC had filed a stipulation telling the FERC they would not oppose the merger, as long as SPS would agree to share certain savings and benefits with Oklahoma retail ratepayers.

* Minnesota Concessions. Still earlier, environmental groups in Minnesota had ended their opposition to the Xcel deal after NSP had agreed to commit to buying renewable energy, improve efficiency at power plants, study use of new technologies, and file a long-awaited plan at the state PUC to replace the Prairie Island nuclear plant and not bypass the PUC on future energy needs planning.

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