Reliant Continues Buying Spree Across Country
Three years ago, Reliant Energy was a Texas-based,
Texas-centered utility, but that's no longer true. On Friday, the
Houston-based utility improved its presence in the Mid-Atlantic
region, completing a $2.1 billion acquisition from Sithe Energies
of 21 power plants in Pennsylvania, New Jersey and Maryland (PJM).
The facilities together total 4,276 MW of net generating capacity
and bring Reliant's domestic generating capacity to 23,000 MW.
Sixteen of the plants are located in Pennsylvania, four in New
Jersey and one is in Maryland --- purchases that come at an
opportune time for the acquisitive Texas company. Last week heat
wave in the Mid-Atlantic region, pushing up power and gas prices
because of tightening supplies.
"This acquisition significantly advances our strategy of owning
power generation assets in key regions of the country and using our
commercial skills in energy trading and marketing to optimize the
value of the assets," said Steve Letbetter, Reliant Energy CEO.
"[I]t will have a positive impact on our earnings and was a key
component in allowing us to raise our earnings growth expectations
for the year to 10% to 12%."
All of the acquired power plants are fueled by a combination of
coal at 50%; oil and natural gas, 46%; and hydro, at 4%, and they
represent a combination of baseload, peaking and intermediate
"The PJM market is a high-priority commercial region for us, and
we are pleased to achieve a very substantial power generation
presence," said Joe Bob Perkins, president and chief operating
officer of Reliant Energy Wholesale Group. "This acquisition is a
key addition to our strategic portfolio of assets and market
Reliant only began acquiring other utilities a little more than
two years ago, and since that time, it has grown its unregulated
power generation business to 9,000 MW in seven states, said
"With another 14 MMW in Texas that will be deregulated January
1, 2002, we are well on our way to becoming one of the nation's
largest power generators."
Reliant's wholesale energy trading and marketing business ranks
among the top five in the U.S. in combined electricity and natural
gas volumes, and has a presence in most of the major power regions
of the country. Currently, it has more than 26 MMW of power
generation in operation in the U.S. and western Europe, and has
also announced development projects and acquisitions that are
expected to add nearly 6 MMW, according to the company.
Carolyn Davis, Houston
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