Allegheny to Acquire 3 Midwest Power Facilities From Enron
Allegheny Energy Supply LLC is in the process of adding 1,710 MW
to its generation portfolio, the company announced last week. Its
unregulated subsidiary has entered into a definitive agreement with
Enron North America to acquire three gas-fired generating plants in
the Midwest for an undisclosed amount.
The plants, which have been in service since June 2000, include
the 546 MW Gleason plant in Gleason, TN, the 508 MW Wheatland plant
located in Wheatland, IN, and the 656 MW Lincoln Energy Center
plant in Manhattan, IL. The facilities will give Allegheny Energy
new generating capacity in the East Central Area Reliability region
(ECAR), the Mid-America Interconnected Network (MAIN) and the
Southeastern Electric Reliability Council (SERC).
"Today's announcement of our purchase of Enron's Midwest
generating assets is a pivotal step in our plan to transform from a
regional generating company to a national energy supplier," said
Alan J. Noia, CEO of Allegheny Energy. "The acquisition of Enron's
new, efficient natural gas-fired assets, along with other recently
announced generation projects and acquisitions, positions Allegheny
Energy in areas of the country with growing demand for energy."
The Hagerstown, MD-based company said it plans on financing the
purchase through a mix of debt and equity and expects the assets to
be accretive on its earnings in 2001.
"Allegheny has had a strategic growth strategy to double our
generation capacity within the next five years," said spokeswoman
Janice Lantz. "This is part of our plan to expand into markets that
we have researched and determined would be good competitive markets
for us to be in."
An Enron spokesman said that this transaction does not signify
an exit from the electric generation market in the Midwest, citing
existing or planned generation facilities the company has in
Tennessee and Illinois.
"From our vantage point, we certainly are one of the leaders
into the peaking plant market," said Enron spokesman Eric Thode.
"We still have a number of others [plants] and are developing some
others as well. So, it is not like this is an exit from the peaking
plant market. At this point in time, we believe that in those
particular areas there is a good amount of supply, the market is
fairly liquid, and we don't feel like we need to hold those
particular assets to continue to do the things that we do in those
markets. They made an offer that was good, so we took it."
The companies expect to have regulatory approvals by the second
quarter of 2001.
The transaction is the latest addition to the electric portfolio
of Allegheny Energy. The company previously announced the
construction of a $540 million, 1,080 MW gas-fired plant in La Paz
County, AZ, and the purchase of 83 MW from the Conemaugh generating
facility in Pennsylvania. The company also expects to build a 540
MW gas-fired plant in Springdale, PA, and another 220 MW of peaking
capacity is in construction in Pennsylvania.