Houston-based Reliant Energy has shelved plans to potentiallysell its natural gas distribution businesses and its interstatepipeline companies “at least for the near term,” said a companyspokesman.

Following a three-month evaluation period, the company announcedlast week that it would retain its distribution assets ReliantEnergy Arkla and Reliant Energy Minnegasco, and the Reliant EnergyInterstate Pipeline Group. The latter group includes Reliant EnergyGas Transmission and Mississippi River Transmission Corp. Reliantalso considered selling its Energy Field Services group, butdecided otherwise.

Reliant Energy, however, would not rule out the possibility ofselling the assets in the future. “I don’t think we foresee thesale of those assets anytime soon. But I can’t give you a firm’yes’ or ‘no’ on that. We are leaving a small option open,” saidcompany spokesman Sandy Fruhman.

Although “there was interest expressed in some or all of theassets” by potential buyers, Fruhman said the detailed evaluationconducted by Reliant Energy revealed the unfavorable effects ofsuch a sale. For example, she noted the company would have incurreda “substantial tax liability” if it had sold the assets outright.

“We never have said definitively that we were going to sellthose divisions,” she noted. After “looking at the overall bigpicture, we decided that selling those assets was not the bestoption for the company in the near term.”

Reliant Energy began evaluating the potential sale of its gasdistribution and pipeline properties in March as part of its effortto re-position the company as a growth company. In the end, itconcluded there were “better options to achieve our growthstrategy,” said Reliant Chairman and President R. Steve Letbetter.

“We’re a company that’s in transition” from a regulated utilityto a growth-oriented company, said Fruhman. Reliant’s focus is onexpanding its growth businesses, such as wholesale energy tradingand marketing, and power generation.

Reliant Energy is ranked among the top five in U.S. wholesaleelectricity and natural gas trading and marketing. It also has morethan 26,000 MW of power generation in operation in the U.S. andwestern Europe, and has announced acquisitions and developmentprojects that will add nearly 6,000 MW.

Reliant Energy said it was continuing to pursue its previouslyannounced plan to divest its minority interests in electricdistribution assets in Latin America. But there was “nothingdefinitive” to report on potential buyers, Fruhman said.

Susan Parker

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