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Entergy Seeks Help for Wholesale Electric Trading Unit

Entergy Seeks Help for Wholesale Electric Trading Unit

New Orleans-based Entergy confirmed earlier this month that it has been involved in talks regarding a possible joint venture between its wholesale electricity trading unit, Entergy Wholesale Operations (EWO), and another undisclosed company. Entergy said it hopes to make an announcement within five weeks. No other details about a possible deal were given.

"This is something that has been going on for a while. But the reports are true. We are looking to help hedge our price risk in the wholesale electric trading business by creating a joint venture," said Carol Clawson, an Entergy spokeswoman.

Based in Houston, EWO employs more than 100 people. It has been operating for more than three years. In 1999, the unit lost $500,000 in income. Yet, despite its poor financial results, the unit still finished in the top 10 of the power marketer rankings by selling 106.8 million MWh in 1999. That total marks an 8.8 million MWh increase over 1998's numbers.

Entergy owns, manages, or invests in power plants generating nearly 30,000 megawatts of electricity domestically and internationally and delivers electricity to about 2.5 million customers in portions of Arkansas, Louisiana, Mississippi and Texas.

If the joint venture occurs, it will not be the first major change for Entergy's wholesale team this year. Last January, EWO was created when Entergy Power Marketing (EPMC) and Entergy Power Group (EPG) merged into a single entity. The unit was to be a major part of the company's five-year growth strategy announced last December when the company unveiled a five-year $9.8 billion capital investment plan. Of that total capital amount, Entergy had planned to spend $3.9 billion to grow its wholesale operations.

John Norris

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