By the OGJ Online Staff
HOUSTON, Jan. 2 -- A unit of Edison International, the troubled California utility holding company, said energy marketer Mirant Corp. was canceling acquisition of 50% of EcoElectrica, a power project in Puerto Rico.
Last month Mirant executives said the deal could be canceled, if it wasn't completed by Dec. 31. Edison Mission Energy said it didn't agree Mirant has the right to terminate the deal and is reviewing its alternatives.
Mirant, Atlanta, Ga., agreed to buy 100% of EcoElectrica Holdings Ltd. in July for $600 million from units of Edison and Enron Corp., which is attempting to reorganize under Chapter 11 bankruptcy proceedings in New York. Edison and Enron units each own 50% of EcoElectrica.
EcoElectrica owns a 540-Mw gas-fired, combined cycle power plant. Also included in the acquisition was a liquefied natural gas (LNG) terminal that provides natural gas to the power plant. It was unclear if the LNG terminal would be affected. An Edison spokesman said the company wouldn't comment further.
Mirant on Dec. 20 became the latest power producer with major trading and marketing operations to cut its spending plans after its credit ratings were downgraded. Chief Financial Officer Ray Hill said the company's scaled-back growth plans were intended to maintain existing ratings and help convince Moody's Investor Services to reinstate Mirant's investment grade rating.
During a call with analysts in December, he said the plan included an assumption Mirant's planned acquisition of EcoElectrica wouldn't close by yearend. CEO Marce Fuller said that was looking less likely, in which case the contract was cancelable.
Rosemead-based Edison has worked for more than a year to put its financial house back in order after last year's spike in wholesale electricity prices that left its electric utility subsidiary Southern California Edison Co. struggling to avoid bankruptcy. The utility couldn't pass on the higher costs to consumers under California law.
Separately, Mirant Wednesday said its Chilean subsidiary, Mirant Chile SA., completed the sale of its interest in Empresa Electrica del Norte Grande SA (Edelnor) to F.S. Inversiones Ltd. for $4.5 million.
