Electric Power news briefs, December 19
Calpine Corp. ... Power Systems Mfg. LLC ... Southern Energy Inc. ... Potomac Electric Power Co. ... Questar Corp. ... Scana Corp. ... FortisUS Energy Corp. ... Allegheny Energy Inc. ... American Electric Power Co. Inc. ... Exelon Corp. ... Sithe Energies Inc. ... PSEG Americas Ltd. ... Inverder SA
Calpine Corp. said it acquired Power Systems Mfg. LLC (PSM), Boca Raton, Fla., a combustion turbine component engineering, design and manufacturing manufacturer for $43 million, including $10.7 million in Calpine common stock, totaling 280,000 shares, and $32.3 million in cash. The majority of the cash payments will be made in five equal annual installments beginning in January 2002, and is contingent upon future PSM performance, Calpine said.
Southern Energy Inc. reported completing the acquisition of four power plants with electric generating capacity totaling 5,154 Mw and other assets from Potomac Electric Power Co. (Pepco) for a net purchase price of $2.65 billion. Southern Energy said it expects the acquisition to add to earnings, and has already included the expected positive effect in its previously released 2001 earnings projections of $1.15-$1.20/share. Southern Energy has agreed to sell power from the power plants back to Pepco for up to 4 years.
Questar Corp. Chief Executive R.D. Cash said 2001 capital spending will be between $368 million-$563 million, a potential record for the natural gas company. The higher spending, Cash said, will occur if construction begins as scheduled on two major pipeline projects. Questar's storage, transportation, and distribution systems operated at or near capacity during November, he said, resulting from colder winter temperatures and growing natural gas use for electricity generation. November was the coldest on record in Questar's Utah service area. Questar's interstate pipeline system had no excess transportation capacity, while the company's gas distribution utility was forced to curtail service to industrial customers for several days to ensure adequate supplies for residential users. With higher wellhead prices, Cash said, Questar will meet or exceed the First Call earnings estimate of $1.67/share for 2000.
Scana Corp. said it received approval from the South Carolina Public Service Commission to raise natural gas rates to 99.340�/therm from 78.151�/therm, the third increase approved this year by regulators. The increase will go into effect in the first billing cycle in January 2001 and will raise residential customers' bills an additional 19.25%, or $127.70/year. So far this year, regulators have approved increases totaling 45.3%.
FortisUS Energy Corp., a subsidiary of Maritime Electric Co. Ltd., reported it has purchased the 5 Mw Dolgeville hyroelectric plant, Dolgeville, NY, and the 2 Mw Diana project, Diana, NY. Both plants were commissioned in mid-1985. Terms of the transaction and the seller were not disclosed.
Allegheny Energy Inc. reported it expects earnings per share for 2000, before extraordinary and other charges, to be in line with its previously estimated target of $2.80-$2.90/share, compared to $2.64 in 1999. Company officials said they are optimistic 2001 earnings per share will be $3.10-$3.30/share, a 10% increase from 2000 results.
American Electric Power Co. Inc. (AEP) said it will employ a urea-based system as the source of ammonia for the plant's selective catalytic reduction (SCR) system at its coal-fired 2,600 Mw Gen. James M. Gavin Plant, Cheshire, Ohio. Previously, the company said anhydrous ammonia would be used in the SCR system to achieve the reductions in nitrogen oxide (NOx) emissions required by the US Environmental Protection Agency. Company officials said the change was made after the community expressed fear of the impact of a major release of anhydrous ammonia. AEP and other power generators in the Midwest and Southeast are required by federal mandate to reduce NOx emissions by May 2003.
Exelon Corp. said it acquired 49.9% of the stock of Sithe Energies Inc., completing a $682 million deal reported Aug. 11. The remaining 50.1% of Sithe will be owned by Vivendi (34%), Marubeni Corp. (15%), and Sithe management (1%). Under the agreement, Exelon has the option to purchase the remaining 50.1% of Sithe within 2-5 years at a price based on prevailing market conditions when the purchase option is exercised. Exelon estimates the initial investment in Sithe will contribute approximately 1�/share to its consolidated earnings in 2001 and 2002.
PSEG Americas Ltd. has agreed to buy 45% of Inverder SA by yearend and the balance in May 2001 from Astra CAPSA, an affiliate of Repsol YPF, and its partners for $200 million (US), Repsol reported. Inverder holds a 90% interest in Argentina's Empresa Distribuidora de Electricidad de Entre Rios SA (EDEERSA), which has a concession to distribute electricity throughout the Argentine province of Entre Rios. The sale is part of a divestiture plan Repsol YPF agreed to after Repsol purchased YPF in 1999.