FPL Energy Closes on Maine Power Plants
After losing a court battle that would have nullified the
acquisition, FPL Energy Inc. announced last week it closed the
deal to obtain Central Maine Power Co.'s (CMP) non-nuclear
generating assets. The transaction is expected to be completed in
The acquisition was finished only after a federal court rejected
FPL's request for a declaratory judgement that CMP could not meet
essential terms of the sales agreement between the two companies.
Judge John Martin ruled in favor of CMP after two hours of
courtroom proceedings in a New York court.
At the heart of FPL's arguments were decisions passed by FERC
regarding transmission access. The company believes these decisions
make it harder for Maine's older plants to run competitively, and
as a result, it wanted to nullify the $846 million transaction.
"We initiated the court proceedings because we believe that
recent rulings by the [FERC] regarding transmission access
represent a material adverse effect on CMP's generating assets,"
said Michael Yackira, president of FPL Energy, Inc. "However, we
accept the court's decision, and we will proceed accordingly." FPL
was unavailable for further comment.
David Flanagan, president of CMP Group called the decision a
"victory for Maine consumers. CMP has proposed to use the net value
created by the sale to fund rate reductions for electric customers.
Maine's PUC still must approve the proposal.
FPL won the generating assets in an early 1998 auction. The
combined capacity is 1,185, and before the legal troubles, FPL said
it had plans to increase that capacity by 1,500. FPL still has the
right to appeal.
©Copyright 1999 Intelligence Press, Inc. All rights
reserved. The preceding news report may not be republished or
redistributed in whole or in part without prior written consent of
Intelligence Press, Inc.