Electric Power news briefs, November 20

Endesa ... Charbonnages de France ... SNET ... Electricite de France ... New York Mercantile Exchange ... BP ... Illinois Power ... Dynegy ... Southern Energy ... Midwest Independent System Operator ... Alliance RTO ... Mitsubishi Heavy Industries America Inc. ... Western Resources ... Southern Co. ... TEPPCO Partners ... CMS Energy ... Volta River Authority ... AES Nile Power Ltd. ... Skanska ... Tennessee Valley Authority ... Nicor Energy ... Wolverine Power Marketing Cooperative

Nov 20th, 2000


Endesa SA has signed an agreement with Charbonnages de France (CDF) to acquire a 30% interest in the French electricity generator SNET, 81% owned by CDF and 19% by Electricite de France (EDF). The transaction has been authorized by the French government. Endesa, Suez Lyonnaise des Eaux, and RWE were among the bidders. Under the agreement, Endesa can increase its interest in SNET in the medium term. France's second largest electricity company with a 2.5% market share, SNET has five coal plants with 2,600 Mw and generates 6,838 gw-hr annually.

The New York Mercantile Exchange raised margins Friday on its Henry Hub natural gas contract to $5,500 from $4,200 for clearing members, $6,050 from $4,620 for members, and $7,425 from $5,670 for customers.

Solar energy will provide about 10% of the electricity required to operate a Tucson, BP-owned ARCO ampm convenience store, giving Arizona its first retail business use of the technology. The convenience store has been retrofitted with an array of 168 BP Solar polycrystalline solar modules mounted atop the pump island canopy to provide electrical power directly to the facility. The solar demonstration project will generate up to 17 kw of electricity during peak sun hours, enough to light the inside of the store and operate some equipment, BP said.

Illinois Power, a unit of Dynegy Inc., said a request to withdraw its transmission assets from the Midwest Independent System Operator (ISO) and joint the Alliance RTO conforms to the Federal Energy Regulatory Commission's (FERC) prior rulings and is consistent with the agency's policy of encouraging formation of regional transmission organizations. The FERC filing responds to parties who have objected to Illinois Power's withdrawing its participation as a transmission owner in the Midwest ISO. Unlike most members of the Midwest ISO, many members of the Alliance RTO operate in states that have electric choice, the companies said.

Southern Energy Inc. said it finalized an agreement to purchase eight combustion turbines from Mitsubishi Heavy Industries America Inc. with an option to purchase additional units. The turbines, Mitsubishi's M-501-F models, are designed to have an electric generation capacity of 185 Mw, with additional capacity possible under certain configurations and operating conditions. The turbines are expected to be delivered during 2002. The additional units, if purchased, would be scheduled for delivery in 2003 and 2004.

Western Resources Inc. said its subsidiary, Westar Industries Inc., received a $37.5 million payment resolving a contractual dispute involving purchase price adjustments and other post-closing matters arising from Westar Industries' purchase of Westinghouse Electric Corp.'s home-monitored security business in December 1996. None of the parties to the dispute admitted or denied the validity of the claims that were the subject matter of the dispute.

Southern Co. reported it plans to sell about 20 million shares of new common stock in December. The proceeds will be used to invest in wholesale generation and the company's regulated business in the Southeast as well as to reduce debt, said Chairman A.W. Dahlberg. The offering is being led by Goldman, Sachs & Co.

TEPPCO Partners LP said TEPPCO Crude Pipeline LP will acquire $91 million in pipeline assets from Duke Energy Field Services LP, a unit of Duke Energy Corp. The assets include the 38,000 b/d Panola pipeline, a 189-mile NGL pipeline from Carthage, Tex., to Mont Belvieu, Tex., and the 11,000 b/d San Jacinto pipeline, a 34-mile NGL pipeline from Carthage to Longview, Tex. Annual revenues are estimated to be about $15 million and earnings before interest, taxes, depreciation, and amortization are expected to be about $13 million, TEPPCO said. The transaction will add 3-4�/unit to cash flow in 2001, it said. Subject to regulatory approval, the transaction is expected to close by Dec.31.

CMS Energy Corp. and its partner, Ghana's Volta River Authority (VRA), reported commercial operation of the second of two oil-fueled combustion turbine generators comprising the second phase of the 220 Mw Takoradi thermal power plant at Aboadze, Ghana. VRA holds a 10% interest with an option to increase its ownership to 30%. The facility sells its output to VRA under a long term-agreement. CMS and VRA are adding a third, 110 Mw steam turbine-generator, converting the Takoradi facility to combined cycle operation.

AES Nile Power Ltd., a unit of AES Corp., has contracted with Sweden's Skanska AB, a member of an international consortium including Norway's Veidekke AS, to construct a $320 million (US), 200 Mw hydropower plant in Bujagali, Uganda, Skanska reported. Implementation of the project is contingent upon receipt of financial guarantees from the Export Credits Guarantee Board in Sweden, as well as from export credit agencies in Norway, Finland, Germany, Switzerland, the UK, and Italy. The project, scheduled to begin in summer 2001 and to be completed in 44 months, will boost Uganda's electricity output by more than 40%.

In the Southeast's first commercial-scale use of wind power to generate electricity, the Tennessee Valley Authority (TVA) reported the three turbine, $3.4 million, 2 Mw Buffalo Mountain project has begun operating. The project is part of a 1-year pilot program under which TVA customers can choose electricity generated by wind, sunlight, and landfill gas. They will have to pay $4/block, or 150 kw-hr, in addition to electricity from traditional sources, mainly coal-fired plants, TVA said.

The Michigan Public Service Commission approved Nicor Energy LLC and Wolverine Power Marketing Cooperative Inc.'s licenses to sell electric generation service to Michigan retail customers under the Customer Choice and Electricity Reliability Act of 2000. The law allows most retail customers of electric utilities to choose an alternative electric supplier by Jan. 1, 2002.

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