The New England electric market is getting crowded, so crowdedthat a Florida-based utility poised to move into that market now istrying to get out of an $846 million deal to purchase Mainegenerating assets.

The FPL Group has gone to court to nullify the arrangement madelast January to buy the non-nuclear generating plants owned byCentral Maine Power. Florida Power said the Federal EnergyRegulatory Commission changed its rules in a way that will make itharder to run Maine’s older power plants in competition with newplants now being built. A FERC order on restructuring of the NewEngland Power Pool (NEPOOL) issued in October threw out a provisionthat had been in effect since 1971 requiring new power generatorsto pay for upgrades to NEPOOL’s transmission system so there wouldbe enough transmission capacity to go around. Without this rulethere could be a shortage of transmission capacity. Also, thenewer, more efficient plants will be more competitive since theyare not burdened with the costs of new transmission. It will beawhile before the actual amount of new capacity is determined, buta variety of companies have announced plans for up to 20,000 MW.

One market source said FPL had an extra incentive to drop a dealit had become disillusioned with after discovering its winning bidwas about $200 million above the offers of contending potentialowners.

Central Maine is fighting to collect the $846 million, sayingFlorida Power knew the electric market is undergoing restructuring.And, in fact, the auction sale of the 1,185 MW in hydro andoil-fired plants was done in compliance with the state’s unbundlingplans. The deal, which lacks state and federal approvals, has notbeen completed.

Ellen Beswick

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