Electric Power news briefs, September 15
Hostmark Hospitality Group ... Electric City Corp. ... Innogy Holdings PLC ... El Paso Energy Corp. ... Coastal Corp. ... Commonwealth Edison Co. ... Green Mountain Energy Co. ... Southern Energy Inc. ... Public Service Co. of New Mexico ... FPL Energy Services ... BP ... Vastar Resources Inc.
Hostmark Hospitality Group has contracted with Electric City Corp. to begin providing EnergySaver systems to the 128 hotel properties Hostmark owns or manages, Electric City said. Electric City may also provide upgrades to electrical switchgear and power monitoring systems at several of the hotels. Transaction terms were not disclosed. Electric City CEO John Mitola said deregulation has created concern over the ability of traditional utilities to provide historic levels of reliability due to new, market-based price and cost constraints.
The UK's National Power PLC unit Innogy Holdings PLC reported it has acquired the major supply business assets of the Independent Energy Group, including contracts to sell electricity to about 240,000 customers, including 100,000 domestic customers for �10 million. The acquisition does not include Independent Energy's liabilities of Independent Energy prior to the appointment of receiver and its book of debts, Innogy said. The administrative receivers from KPMG will continue to run the generating and resource business of the Independent Energy Group while seeking a buyer for the units, said KPMG's Roger Oldfield.
El Paso Energy Corp. and Coastal Corp. said they will consolidate the operations of their five pipeline systems into three organizations, headed by John W. Somerhalder II. The consolidation will take effect upon close of the merger between the two companies. The western region will consist of El Paso Natural Gas Co. and Colorado Interstate Gas Co., headquartered in Colorado Springs, Col. The eastern region will consist of ANR Pipeline Co. and Tennessee Gas Pipeline Co., headquartered in Houston. Southern Natural Gas Co. will make up the southeastern region headquartered in Birmingham, Ala. While the companies will be organizationally merged for back office purposes, the five systems will remain separate pipelines with separate tariffs and separate names, the companies said.
Commonwealth Edison Co., a unit of Unicom Corp, Chicago, said the number of outages this summer is down 19% from the same time last year, while the average duration of outages/customer declined 25%. ComEd launched a 2-year, $1.5 billion reliability improvement in September 1999. Five specific areas were identified for improvement: maintenance, equipment protection and monitoring, load and capacity, system optimization, and organization and management. In June, July, and August of this year, ComEd also refunded more than $600,000 to about 9,500 customers as part of the program..
Green Mountain Energy Co. said it is refiling its application with the Department of Public Utility Control (DPUC) in anticipation of becoming a licensed electricity provider in Connecticut by yearend. Citing cumbersome licensing procedures at the DPUC, Green Mountain withdrew its original application for licensing earlier this year. Since that time, the privately held company has announced a major investment from BP and said it has been encouraged by the progress the DPUC has made in streamlining the licensing process.
Southern Energy Inc., a unit of Southern Co., reported has reorganized its Americas Group, which is responsible for operations in North and South America and the Caribbean. The reorganization follows Southern Energy's purchase of Vastar Resources Inc.'s minority stake in Southern Company Energy Marketing. Southern Company Energy Marketing coordinates energy marketing activities with the operation of Southern Energy's North American power plants and other assets, and now as a wholly owned company can operate as an integrated part of Southern Energy, the company said.
Public Service Co. of New Mexico (PNM) said it has raised its earnings estimates for the third quarter, for 2000 and for 2001. An exceptionally strong wholesale power market, additional generating capacity, and warmer than normal temperatures are expected to boost ongoing earnings (before any one-time items) to between 85-90�/share for the third quarter, said CEO Jeff Sterba. He said the company expects to earn on an ongoing basis $2.30-2.40/share in 2000, and $2.40-2.50/share in 2001. The increase in anticipated earnings is primarily due to the profitability of PNM's wholesale power marketing business and to cost reductions, the company said. PNM wholesale power revenues totaled $193.4 million in July and August, an increase of nearly 90% over the same two months in 1999. August also marked the 10th month in a row during which the average temperature has been at or above normal in the city.
Beginning this fall, pending approval by the Florida Public Service Commission, FPL Energy Group Inc. subsidiary FPL Energy Services said it will begin natural gas service to businesses in additional metropolitan areas such Tampa, Orlando, Jacksonville, Fort Lauderdale, Daytona Beach, and Miami Beach among others. Florida Power & Light Co., FPL Group's principal subsidiary, is the largest buyer of natural gas in the state. In the last 2 years, new regulations have resulted in more competition to supply gas to businesses in other parts of the state. Previous markets to unfold include parts of western Miami-Dade, Brevard, and Indian River counties. Recent Florida Public Service Commission rulings will allow even more businesses to take advantage of a competitive market.
BP said it completed the purchase of Vastar Resources Inc., following a favorable vote by Vastar minority shareholders to accept BP's offer of $83/share. BP already owned 81.8% of Vastar shares, acquired when the company purchased Arco earlier this year. The cost of this purchase is approximately $1.5 billion.