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FPL Energy Closes on Maine Power Plants

FPL Energy Closes on Maine Power Plants

After losing a court battle that would have nullified the acquisition, FPL Energy Inc. announced last week it closed the deal to obtain Central Maine Power Co.'s (CMP) non-nuclear generating assets. The transaction is expected to be completed in April.

The acquisition was finished only after a federal court rejected FPL's request for a declaratory judgement that CMP could not meet essential terms of the sales agreement between the two companies. Judge John Martin ruled in favor of CMP after two hours of courtroom proceedings in a New York court.

At the heart of FPL's arguments were decisions passed by FERC regarding transmission access. The company believes these decisions make it harder for Maine's older plants to run competitively, and as a result, it wanted to nullify the $846 million transaction.

"We initiated the court proceedings because we believe that recent rulings by the [FERC] regarding transmission access represent a material adverse effect on CMP's generating assets," said Michael Yackira, president of FPL Energy, Inc. "However, we accept the court's decision, and we will proceed accordingly." FPL was unavailable for further comment.

David Flanagan, president of CMP Group called the decision a "victory for Maine consumers. CMP has proposed to use the net value created by the sale to fund rate reductions for electric customers. Maine's PUC still must approve the proposal.

FPL won the generating assets in an early 1998 auction. The combined capacity is 1,185, and before the legal troubles, FPL said it had plans to increase that capacity by 1,500. FPL still has the right to appeal.

John Norris

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