Electric Power news briefs, July 6
Cinergy Corp. ... Convergent Group ... TransAlta Corp. ... Quanta Services Inc. ... DQE Inc ... Ballard Power Systems Inc. ... EBARA Corp. ... American Electric Power Co. Inc.
Cinergy Corp., Cincinatti, said it will buy about 5% of the Convergent Group, in connection with a strategic alliance being formed by the two companies. The Phase I investment of $10 million, now complete, will be supplemented by a Phase II investment in Convergent on its initial public offering at a discount to the IPO price, Cinergy reported. Concurrently, Cinergy has engaged Convergent Group to codevelop and implement a multi-tiered customer service program through which Cinergy will use the internet to more effectively compete in the changing energy marketplace. Cinergy Vice-Chairman James Rogers said in the coming months Cinergy will use Convergent technology to web-enable Cinergy to do virtually all business with customers directly. The new platform being developed by Convergent Group will support web-based applications for residential, commercial, and industrial customers. These will include self-application and scheduling of services; on-line processing of land development site plans; and energy management tools such as real-time access to energy usage, load profile and bill estimation, and on-line energy purchase transactions.
The Alberta Energy & Utilities Board has approved UtiliCorp United Inc.'s purchase of TransAlta Corp.'s Alberta distribution and retail operations for about $450 million, UtiliCorp said. The deal was announced in February and is expected to close later this summer. The transaction includes UtiliCorp's retention of TransAlta's 650 distribution and retail employees, 350,000 customers served by about 90,000 km of low-voltage power distribution lines, and a 24-hr customer call center in Calgary. UtiliCorp's Canadian interests include its West Kootenay power subsidiary in British Columbia and Calgary-based gas and electricity marketer Aquila Canada.
Quanta Services Inc., Houston, reported plans to sell about 2,725,000 shares of common stock and $150 million of convertible subordinated notes under its existing universal shelf registration statement. The proceeds will be used to repay indebtedness under the company's credit facility and for general corporate purposes, including to fund acquisitions and capital expenditures and for working capital purposes, the company said. Quanta's managing underwriters for the securities offerings are Morgan Stanley Dean Witter, Banc of America Securities LLC, Bear Stearns & Co. Inc., Raymond James & Associates Inc., SunTrust Equitable Securities, and Wachovia Securities. Quanta Services Inc. designs, installs, repairs, and maintains networks for the telecommunications, cable television, and electric power industries.
DQE Inc., Pittsburgh, said its second quarter earnings will fall below 1999 results. In addition to lower earnings on stranded costs of approximately 16�/share during the second quarter in 2000, DQE will recognize two one-time charges against earnings during the same quarter, totaling approximately $11 million, or an additional 16�/share. DQE's subsidiary, CBM LLC, terminated a coal bed methane project in Greene County, Pa., during the quarter and will record a charge to write-off the related assets and settle outstanding obligations. Also, AquaSource, a DQE subsidiary, will record a charge during the second quarter related to various purchase accounting issues. In addition, DQE is implementing a consolidation of its administrative resources and has targeted a reduction in excess of $40 million�on an annual basis�to take effect in the fourth quarter of this year. However, on an annual basis, the Company expects earnings growth of 5-8%/share.
Japan's EBARA Corp. has increased its ownership position in Ballard Power Systems Inc. unit Ballard Generation Systems (BGS) to 11.4%, or 10% on a fully diluted basis, from 6% for a total subscription price of $19.1 million, Ballard Power Systems reported. EBARA was granted the option to increase its ownership position of BGS to 10% when EBARA made its original investment in 1998 as part of a $31 million transaction. EBARA is involved in the development of cogeneration systems combining Ballard fuel cell stationary power generators with EBARA's absorption chillers. BGS was formed to commercialize proton exchange membrane (PEM) fuel cell power generators that use the Ballard fuel cell.
Cook nuclear plant Unit 2, Bridgman, Mich., reached 100% power Wednesday, American Electric Power Co. Inc. reported. The Nuclear Regulatory Commission concurred that the plant was safe and ready for restart June 13. The unit returned to service for AEP on June 25, ending a 33-month shutdown. The reactor was refueled during the shutdown. There is enough fuel available for 18 months of full power operation, AEP said. Cook officials are currently determining the return-to-service schedule for Cook Unit 1.