After losing a court battle that would have nullified theacquisition, FPL Energy Inc. announced last week it closed thedeal to obtain Central Maine Power Co.’s (CMP) non-nucleargenerating assets. The transaction is expected to be completed inApril.

The acquisition was finished only after a federal court rejectedFPL’s request for a declaratory judgement that CMP could not meetessential terms of the sales agreement between the two companies.Judge John Martin ruled in favor of CMP after two hours ofcourtroom proceedings in a New York court.

At the heart of FPL’s arguments were decisions passed by FERCregarding transmission access. The company believes these decisionsmake it harder for Maine’s older plants to run competitively, andas a result, it wanted to nullify the $846 million transaction.

“We initiated the court proceedings because we believe thatrecent rulings by the [FERC] regarding transmission accessrepresent a material adverse effect on CMP’s generating assets,”said Michael Yackira, president of FPL Energy, Inc. “However, weaccept the court’s decision, and we will proceed accordingly.” FPLwas 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 valuecreated 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. Thecombined capacity is 1,185, and before the legal troubles, FPL saidit had plans to increase that capacity by 1,500. FPL still has theright to appeal.

John Norris

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