PPL Global Inc., Allentown, Pa., the development and international operating subsidiary of PPL Corp., has won an international tender to purchase 84.7% of Companhia Energetica do Maranhao (CEMAR), a Brazilian electricity distribution company, for about $289 million from the state of Maranhao, the Brazilian development bank BNDESPAR, and Eletrobras, a Brazilian generation company. PPL said the agreement is part of the country's integrated strategy to acquire and operate high-growth electricity delivery businesses in Latin America and elsewhere. CEMAR serves about 977,000 customers in Maranhao and sold about 2,293 Gw-hr of electricity in 1999. CEMAR is undergoing significant growth. Only 70% of Maranhao has electricity service, and demand is increasing, PPL said. Electricity consumption in the CEMAR service area grew at 7.5%/year from 1985 through 1999. The acquisition is expected to add to earnings beginning in 2002 and will be financed initially with short-term debt.
US Propane LLC, Dallas, reported it will combine with Heritage Holdings Inc., the general partner of Heritage Propane Partners LP, to create the fourth largest retail propane distributor in the US. Through a series of transactions, US Propane will be the general partner in a master limited partnership that will distribute propane to more than 480,000 customers in 28 states. Under the agreements, US Propane will sell its propane business to Heritage Propane Partners for about $181 million in cash and limited partnership units of Heritage Propane Partners. US Propane will purchase all of the outstanding common stock of Heritage Holdings, the general partner of Heritage Propane Partners, for $120 million. Upon closing of the transaction, expected later this summer, US Propane will own all of the general partnership interest and about 34% of the limited partnership interest in Heritage Propane Partners, the master limited partnership. Shares of the general partner will be held proportionately among the four companies that formed US Propane earlier this year�AGL Resources Inc., Atlanta; Atmos Energy Corp., Dallas; TECO Energy Inc., Tampa; and Piedmont Natural Gas Co. Inc., Charlotte, NC.
The New York Mercantile Exchange raised margins on its California-Oregon border and Palo Verde electricity futures contracts and on the July and August 2000 contracts for Cinergy, Entergy, and Pennsylvania-New Jersey-Maryland (PJM) electricity futures June 14. Margins on California-Oregon border and Palo Verde electricity futures were increased to $5,800 from $3,300 for clearing members; to $6,380 from $3,630 for members; and to $7,830 from $4,455 for customers. Margins for the Cinergy, Entergy, and PJM July and August 2000 futures contracts were raised to $12,500 from $10,000 for clearing members; to $13,750 from $11,000 for members; and to $16,875 from $13,500 for customers. Margins on spreads involving the July or August 2000 contracts were raised to $10,900 from $8,400 for clearing members; to $11,990 from $9,240 for members; and to $14,715 from $11,340 for customers. Margins on spreads between all other months remained unchanged.
Intergy LLC, Los Angeles, and the Solstice Group Inc. reported Thursday they have merged to form RealEnergy Inc., a company specializing in energy technology serving commercial real estate owners. Simultaneously with the merger, RealEnergy is in the process of closing a $2.5 million first-round equity offering. RealEnergy will help commercial real estate clients aggregate power purchasing and employ best practices energy generation and management technologies. The company will also purchase commodity power for its clients. RealEnergy is building one of the nation's first development projects to incorporate private utility infrastructure. The initial development phase of the 19-acre Pleasanton Power Park in the San Francisco Bay area is expected to be completed this summer and will employ on-site generation.
Current drought conditions aren't "significantly" affecting Alabama Power's ability to meet customers' electricity needs, the company said in a statement Thursday. Alabama Power, Birmingham, a unit of the Southern Co., has been tracking the Southeast drought forecast and has been monitoring the situation closely for several months, says Andy Sheppard, reservoir operations coordinator. Lake levels are well below normal summer pool elevations at Weiss, Henry, and Logan Martin lakes on the Coosa River and Smith Lake on the Black Warrior River. Lake levels on Harris and Martin lakes on the Tallapoosa River may be lowered considerably if drought conditions continue. Alabama Power is managing its hydroelectric plants to keep lakes as full as possible, while balancing power-generation, navigation, environmental, and recreational needs, Sheppard says.