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Midwest Generation Formed to Run ComEd Plants

Midwest Generation Formed to Run ComEd Plants

Edison Mission Energy, an Edison International company established Midwest Generation EME LLC to own and operate Illinois fossil-fuel electric generating plants to be acquired from Commonwealth Edison later this year. Midwest Generation EME also will operate a coal-fired power plant in Homer City, PA, which was acquired earlier this year.

Georgia Ricci Nelson, formerly senior vice president, worldwide operations for Edison Mission Energy, has been named president of Midwest Generation EME. The new company will locate its headquarters in Chicago later this year. Nelson also has served as senior vice president of Southern California Edison, Edison International's electric utility subsidiary.

Midwest Generation EME plans to acquire seven coal- and gas-fired plants plus peaking units at an additional five sites from Commonwealth Edison for about $5 billion, pending approval by state and federal regulators. The acquisition includes Fisk and Crawford Stations in Chicago, Collins Station in Morris, Powerton Station in Pekin, Will County Station in Romeoville, Joliet Station and Waukegan Station. The 12 facilities have a combined capacity of 9,261 MW.

"The size of our investment in Illinois made it clear that establishing a new company here to oversee our expanding Midwest operations is the right move at this time," Nelson said.

Midwest Generation EME is in business exclusively to generate power for the wholesale market. Under the terms of the plant acquisitions, Commonwealth Edison will retain rights to buy power generated by the Illinois plants over the next five years to help the utility provide a dependable flow of power to its customers. Midwest Generation EME anticipates acquiring the Illinois plants in the fall. The sale must first be approved by the Illinois Commerce Commission and the Federal Energy Regulatory Commission.

In March Edison Mission announced it would buy the fossil-fueled generating assets of Commonwealth Edison for about $5 billion (see Daily GPI March 24, 1999). Edison Mission Energy has also committed to build 500 MW of gas-fired generating capacity in Chicago.

ComEd parent Unicom got about $1.76 billion over book value for the plants combined. The sale enables Unicom to improve its financial structure and redirect investments, said Unicom and Commonwealth Edison CEO John W. Rowe. The gain of about $1.7 billion after taxes and satisfaction of sales-related obligations is to be used to reduce the cost of ComEd's nuclear-related assets, currently valued at more than $9 billion.

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