TNPC's New Power Company Readies for Retail
In its quest to become the first nationally branded utility in the United
States, TNPC Inc. - an alliance of Enron Corp., America Online and IBM
- said that its initial public offering of 24 million common shares at
$21 per share would net the company nearly $473 million to intensify its
retail marketing efforts and build a customer base. The offering closes
The Greenwich, CT-based company, majority-owned by Enron, in the next
few months hopes to launch services in markets where natural gas and electricity
are deregulated. Through its retail marketing unit subsidiary, The New
Power Company, TNPC will offer direct energy services to residences and
small businesses, along with other customer incentives such as frequent
Publicly launched in May by its strategic partners, it filed in July
with the Securities and Exchange Commission to launch its IPO. TNPC initially
had received a capital infusion from its sponsors of more than $120 million,
and increased its market stake with a purchase in July of Columbia Energy
Group's retail gas and power, mass marketing business. That business now
serves 300,000 retail customers in eight states (see NGI, July
The New Power Company began an intense marketing effort in late August
to grab customers in deregulated markets in Pennsylvania and New Jersey.
The pitch guarantees customer savings of up to 15% for switching from Newark,
NJ-based Public Service Electric & Gas Co. And for new customers who
switch from PECO Energy Co., based in Philadelphia, the marketer is guaranteeing
a savings of up to 25%. There were no figures on the amount of customers
who so far have made the switch.
In a private placement transaction in January, Enron contributed its
residential and small commercial business to the new venture, and with
AOL and IBM, also signed multi-year marketing and service agreements.
Enron owns a 52% stake in TNPC through value-in-kind investments, such
as providing energy commodity pricing, risk management and government regulatory
affairs. IBM is building the corporate infrastructure and web site and
will man the call center. AOL will give TNPC access to its 22 million customers
for six years.
TNCP's shares will be listed under the symbol "NPW." Credit
Suisse First Boston and Donaldson, Lufkin & Jenrette are co-lead managing
underwriters. Chase H&Q, CIBC World Markets, PaineWebber Inc., Salomon
Smith Barney and DLJdirect Inc. are co-managers.
Carolyn Davis, Houston
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