Duke Builds Power, Gas Marketing with NP Energy
Duke Energy Trading and Marketing (DETM) added 1 Bcf/d of gas
sales and 14.07 million MWh of power sales to its marketing
operation with the purchase of NP Energy, which was at No. 20 in
NGI's power marketer ranking by volume in the third quarter. The
move pushes Duke up to No. 3 from No. 5 in gas marketing and to No.
4 from the No. 7 spot in power based on third quarter volumes.
Louisville based NP Energy is one of the fastest growing
marketing operations in the country, ranking 16th in power after
only one year. It was founded in early 1997 by Ed Casey, former
president of Tenneco Energy, and Mike McInnis, former president of
LG&E Power Marketing.
Officials of the privately-owned company, however, realized soon
after forming NP that there were limitations to what it could do.
They began discussing alternatives with potential buyers and merger
partners last summer.
"Scale and considerable credit backing have become critically
important in the energy marketing industry, so Duke Energy's
resources and their track record for innovation make this a logical
step for both parties," said CEO Ed Casey. "We are very proud of
the success of this venture and the performance of our employees,
but it was our view that it would take greater resources and depth
to achieve the growth necessary to remain a leader in the
The agreement calls for Duke Energy Trading and Marketing to
acquire all ownership interest in NP, including interests held by
National Power of America and by an employee group. Duke will
receive NP Energy's portfolio of marketing agreements and major
projects under development. Duke will make a cash payment at
closing and additional payments at a later date based on the
progress of major power projects in NP Energy's portfolio. Closing
of the sale is expected by the first quarter pending approval by
FERC and other governmental reviews.
NP's risk management and project development efforts include
marketing agreements with Big Rivers Electric Corp. and several
other power cooperatives, a planned 325 MW waste coal repowering
project with Ohio National Energy and a planned 650 MW merchant
plant in Kingman, AZ, being developed by PP&L Global, an
affiliate of Pennsylvania Power & Light.
"We are very pleased to add the NP Energy assets to our
portfolio of marketing agreements because they will help build our
critical mass in the U.S. West and Midwest," said DETM President
Brad Karp. "Additionally, our California operations are in place to
manage the Arizona facilities." Duke bought three power plants from
PG&E Corp. earlier this year.
DETM is the wholesale energy trading and marketing arm of Duke
Energy and serves as the exclusive marketer for the North American
natural gas production of Mobil Corp.
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