Electric Power news briefs, October 20
Ipalco Enterprises Inc. ... AES Corp. ... Constellation Energy Group Inc. ... Sierra Pacific Resources ... Unicom Corp. ... and PECO Energy Co. ... Washington Gas Light Co. ... NRG Energy Inc. ... Calpine Corp. ... InterGen ... Energy Management Inc. ... WESCO International Inc. ... Alliant Energy Corp. ... UtiliCorp United Inc. ... Cleco Corp.
Ipalco Enterprises Inc. said shareholders approved an agreement and share exchange under which AES Corp. will acquire Ipalco. Completion of the transaction remains subject to regulatory and other approvals. The transaction is expected to close in early 2001. Ipalco is a multistate energy company. Its regulated subsidiary, Indianapolis Power & Light Co, serves Indianapolis, Ind.and other central Indiana communities.
WESCO International Inc. reported it has acquired the assets and business of KVA Supply Co., Denver, Colo., and KVA Supply Company Southwest, which specializes in supplying product to the underground high-voltage utility industry. Terms of the transaction were not disclosed.
Constellation Energy Group Inc. reported earnings of $147.5 million for the three months ended Sept. 30, 2000, or 98�/share, on revenue of $981.6 million, compared to earnings of $136.1 million, or 91�/share, on revenue of $1 billion for the third quarter of 1999. Earnings for the 3 months ended Sept. 30, 1999, excluding nonrecurring charges, were $1.13/share. Earnings for the 3 months and nine months ended Sept. 30, 2000 reflect a shift in earnings from the regulated utility to the nonregulated domestic wholesale energy business, resulting from the transfer of Constellation unit Baltimore Gas & Electric Co.'s electric generation assets to nonregulated subsidiaries July 1, 2000, the company said. Earnings for the third quarter of 2000 were significantly impacted by mild summer weather, the company explained. Total electric sales for the third quarter of 2000 decreased over 2.6% compared to the same period of 1999, while residential sales decreased almost 11% due to the very cool summer.
Sierra Pacific Resources warned investors high fuel prices will continue to negatively affect earnings. The company said its operating utilities, Nevada Power Co. and Sierra Pacific Power Co., continue to experience very high prices for fuel and purchased power not yet reflected in rates charged to customers. As a result, both units have filed for additional rate increases. Nevada Power has filed for Public Utilities Commission of Nevada (PUCN) approval of additional increases of $16 million to be effective Nov.1 and $16 million to be effective Dec. 1. Sierra Pacific Power Co. has filed with the PUCN for approval of electric rate increases of $26 million effective Nov.1 and $8 million effective Dec. 1.
Unicom Corp. and PECO Energy Co. reported the US Securities and Exchange Commission has approved their merger to form Exelon Corp. The companies expect to complete the deal on Oct. 20. The merger of Unicom and PECO Energy will create a utility with about five million customers and more than $12 billion in annual revenue.
Washington Gas Light Co. reported the Maryland Public Service Commission declined to approve an agreement which would have enabled the company to implement an incentive based rate plan. The agreement was filed jointly with the Maryland Office of People's Counsel and the Maryland Public Service Commission staff Jan. 6. The company said it will continue to charge the base rates that have been in effect since December 1994 and will operate under the existing regulatory process, while reviewing it options.
NRG Energy Inc. has agreed to buy Sierra Pacific Resources's 50% interest in the 286 Mw Valmy power station near Winnemucca, Nev., for $273.3 million, net a payment from Sierra Pacific to NRG for a power purchase agreement, Sierra Pacific reported. Sierra Pacific will have the right to buy energy and ancillary services from the Valmy station for agreed upon prices subject to a collar, through early 2003. Sale of the generation assets is a regulatory condition of Sierra Pacific Resources merger with Nevada Power, completed in July 1999.
Calpine Corp. said has agreed to acquire power assets from Dartmouth, Mass.-based Energy Management Inc. (EMI) for about $145 million and the assumption of about $220 million of project financing. Calpine will acquire the remaining interest in three recently constructed combined-cycle power generating facilities representing a total of 700 Mw in Dighton, Mass.; Tiverton, RI; and Rumford, Me., as well as Calpine-EMI Marketing LLC, a joint venture between Calpine and EMI. Separately, Calpine said it filed a shelf registration with the US Securities and Exchange Commission to sell as much as $1.15 billion of debt, common and preferred stock with the proceeds to be used to finance power plants under construction and for working capital.
InterGen, a joint venture of Royal/Dutch Shell Group and Bechtel Corp., said it has completed debt financing for a 50% stake in the 840 Mw Callide C power project in Queensland, Australia. Completion of the coal-fired plant is scheduled in May 2001. The project finance facility supporting the $325 million project was supplied by a syndicate of National Australia Bank, Bank of America, and BNP Paribas Group. Coal will be sourced from the adjacent Callide coal fields.
Alliant Energy Corp. reported net income of $276.2 million, or $3.49/share, for the quarter ended Sept. 30, 2000 on operating revenue of $658.4 million, up from net income of $71.5 million, or 91�/share, for the comparable 1999 period. Third quarter 2000 earnings include $204 million of net income, or $2.58/share, relating to the company's adoption of a new accounting system July 1, 2000, the company said. Excluding such income, the third quarter 2000 earnings were flat at 91�/share. Third quarter 2000 benefited from lower utility operation and maintenance expenses and increased earnings from the company's oil and gas business, Alliant said, but these items were offset by increased interest expense to fund the company's strategic growth initiatives, a decrease in electric utility margin, and lower gains from asset sales in New Zealand.
UtiliCorp United Inc. unit Aquila Energy has signed a 20-year tolling agreement with Cleco Corp. and Calpine Corp. for 580 Mw of the output of their jointly owned Acadia power project under construction in Acadia Parish, La., Calpine reported. Under the agreement, starting July 1, 2002, Aquila Energy will supply the natural gas needed to generate 580 Mw of electricity and will own and market the produced power. Cleco Midstream Resources LLC, a wholly owned subsidiary of Cleco, and Calpine each have a 50% interest in the Acadia plant.