Electric Power news briefs, November 3
Detroit Edison Co. ... Empire Energy Corp. ... Commonwealth Energy Corp. ... Evergreen Resources Inc. ... Cherryland Electric Cooperative ... Great Lakes Energy Cooperative ... HomeWorks Tri-County Electric Cooperative ... Presque Isle Electric & Gas Co-op ... AES Corp. ... Gener SA ... TransAlta Corp. ... Dominion Energy ... Cleveland Thermal Energy Corp. ... Cleveland District Cooling Corp. ... Madison Gas and Electric Co. ... NiSource Inc.
Detroit Edison Co. received authorization from the Michigan Public Service Commission to sell $1.8 billion in bonds to pay off its stranded assets under the state's electricity restructuring law. The commission also granted the company authority to collect an initial securitization charge of not more than 0.004239�/kw-hr and an initial tax charge of not more than 0.000766�/kw-hour on customers' monthly electric bills. The charges will become effective with the first billing cycle after the bonds are sold bonds for no more than 15 years and are subject to trueups. The securitization charge and the tax charge will be offset by equivalent reductions in current charges on customers' electric bills, the commission said.
US coalbed methane developer Evergreen Resources Inc. said it has priced an offering of 2.8 million shares of common stock at $29.38/share. Net proceeds of the offering will be used to repay debt. The offering was lead managed by A.G. Edwards & Sons Inc. and comanaged by ING Barings, PaineWebber Inc., Howard Weil, a division of Legg Mason Wood Walker Inc., Brean Murray & Co. Inc., and Hibernia Southcoast Capital. The offering is expected to close Nov. 8.
Empire Energy Corp., Overland Park, Kan., said it has reached an agreement in principle to acquire Commonwealth Energy Corp., - an exploration and production company with operations in Texas, Oklahoma, Wyoming, and Alberta - in a stock-swap worth $11 million. Terms of the proposed transaction call for Empire to exchange 1 share for each 6 Commonwealth shares. The acquisition is subject to execution of definitive agreements as well as Commonwealth shareholders and judicial approvals and certain other business conditions set forth in the letter of intent. Closing is expected to occur in 2001. (Corrected version)
The Michigan Public Service Commission approved a settlement agreement granting Cherryland Electric Cooperative, Great Lakes Energy Cooperative, HomeWorks Tri-County Electric Cooperative, and Presque Isle Electric & Gas Co-op authority to reconcile their 1999 power supply costs. The settlement authorizes the companies to reconcile their undercollections through a surcharge on customers' electric bills.
AES Corp. said it will make an offer to acquire all outstanding Gener SA American Depositary Shares (ADSs) in exchange for AES common stock having a value of $16/ADS (US) and is offering to acquire 3.5 billion Gener shares in Chile at the peso equivalent of 24�/share cash. The shares to be acquired in the Chilean offer represent about 75% of the currently outstanding Gener shares, not including Gener shares represented by ADSs. Completion of each of AES's offers is conditioned on amending Gener's bylaws to permit the ownership of more than 20% of the outstanding Gener shares by any person or group which requires the approval of 75% of Gener's outstanding shares.
TransAlta Corp. said it has begun construction of a $400 million (Can.), 650 Mw power project in Sarnia, Ont. The company it will be the largest cogeneration plant in Canada. Full commercial operation of the new plant is expected by October 2002. It will supply Bayer, Dow Chemical Canada Inc., and NOVA Chemicals (Canada) Ltd. Sarnia operations with power and steam. Excess power will be sold into competitive electricity markets, TransAlta said.
Dominion Energy, unit of Dominion Resources Inc., said it has reached an agreement with Cleveland Thermal Energy Corp. and Cleveland District Cooling Corp. to purchase Cleveland Energy Resources, a provider of steam and chilled water to downtown Cleveland. Dominion said it plans to expand the system to serve new construction and additional existing buildings downtown.
Madison Gas and Electric Co. reported earnings of $8.4 million or 51�/share on revenue of $72 million for the quarter ended Sept. 30, 2000, up from earnings of $6 million or 38�/share on revenue of $64.5 million in the comparable 1999 period. The company attributed the increased earnings in part to $40 million of new generating facilities brought online in 2000 and ongoing efforts to control costs.
NiSource Inc. said its NiSource Finance Corp. subsidiary is pursuing through a private placement the issuance of $2 billion of senior unsecured notes. Proceeds from the offering will be used to reduce short-term borrowings incurred in connection with NiSource's acquisition of Columbia Energy Group, completed on Nov. 1. NiSource and NiSource Finance said they have agreed after the notes are issued, they will file a registration statement relating to an exchange offer for them.