Southern Energy New York closed a previously announced $480million, 1,776 MW purchase of all Orange and Rockland (O&R)Utilities’ generation assets Thursday. At the same time the dealclosed the Southern Energy subsidiary, which was created with thesole intention of operating these newly-acquired assets, wasted notime in proposing a $390 million, 710 MW expansion to the BowlinePoint Generation Station in Haverstraw, NY.

The Bowline Point facility, which is one-third owned by O&R andtwo-thirds owned (800 MW) by Con Edison, is the prize in thetransaction. The 1,200 MW power plant delivers electricity straightinto the New York power grid. It uses 300 MMcf/d of gas and theMillennium Pipeline project filed a plan last April to build anextension to the facility (See Daily GPI, April 9). “We’ve already approached the$1000 MWh mark once this summer, so the potential is there,” saidDavid Mould, a Southern Energy spokesman. “I won’t pretend to be aforecaster of weather or price spikes, but we think we’ve gotten intoa profitable position.” For its share of the Bowline facility, ConEdison will receive $133.2 million.

Other stations included in the sale are the Lovett GeneratingStation in Stony Point, NY, the Hillburn and Shoemaker gas turbinesin Hillburn and Middletown, NY respectively, and the Mongaup, Rio,Swing Bridge and Grahamsville hydroelectric facilities in SullivanCounty, NY.

The 1,776 MW sale effectively exits O&R from all generationfacility ownership in the state of New York. “This sale is a majorstep in the development of a wholesale energy market within NewYork State,” said O&R CEO D. Louis Peoples. The divestment washeld as part of the state public service commission’s 1997 plan forelectric restructuring, which requires all the state utilities todivest their generation assets.

Mike Donovan, an O&R spokesman, said only minimal turnoverhas resulted from the sale. Southern agreed to honor all unioncontracts.

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