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Columbia Sells Electric Subsidiary for $200 Million

Columbia Sells Electric Subsidiary for $200 Million

Columbia Energy Group has entered into an agreement with Orion Power Holdings of Baltimore, MD, to sell all of the outstanding shares of its subsidiary Columbia Electric Corp. for $200 million in cash plus the assumption of project-related debt. Included in the deal is 4,000 MW of capacity in construction and development phases.

The sale package includes two natural gas-fired power generating facilities currently under construction, and two natural gas-fired generating facilities in advanced development. The 500 MW simple-cycle Ceredo facility located in Wayne County, WV, and the 568 MW combined-cycle Liberty facility located near Philadelphia, PA, are under construction and expected to be in service in by early 2001 and early 2002 respectively. The 1,650 MW combined-cycle Kelson Ridge station located in Charles County, MD, and the 500 MW simple-cycle Henderson station located in Henderson County, KY, are expected to enter the first stage of construction by mid 2004. In addition, the deal includes gas-fired projects totaling 800 MW in various stages of early development.

Columbia spokesman Michael J. McGarry said the subsidiary sale was not part of the company's merger with NiSource, which is expected to be completed later this month. The projects "were not seen as part of Columbia's strategy going forward, but also it was seen as a way to achieve greater shareholder value," said McGarry .

Columbia withheld its membership interests in four qualifying facilities totaling almost 800 MW in Texas, New Jersey and Maine. Because its merger with NiSource makes its businesses more than 50% utility, the four membership interests will still need to be sold off to stay in compliance with the Public Utility Regulatory Policy's Act of 1978, McGarry said. Negotiations for the membership interests in the four power generation assets are ongoing.

Alex Steis

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