Cinergy Restructures; Plans 330 MW Project
As the nation continues to creep warily forward into natural gas and electricity deregulation on all fronts, Cinergy Corp. understands that in order to take advantage of the full potential of its companies it must change as well. The company announced yesterday that it is embracing a new organizational structure that will increase the autonomy of its subsidiaries and focus on the growing importance of non-regulated markets.
The new structure contains three business units: Energy Merchant; Regulated Businesses; and Power Technology and Infrastructure Services. Each unit will have a CEO who will be responsible for developing a vision and setting strategic direction and goals, and a president who will be responsible for executing each unit's business plan.
"Today, about 50% of our earnings come from non-regulated markets, a dramatic change from five years ago when nearly all of our earnings came from our regulated business," said James E. Rogers, CEO of Cinergy. "Our new organization more clearly defines the regulated and unregulated businesses, while providing platforms for future growth."
The Energy Merchant business, which will operate power plants and be responsible for all wholesale energy marketing, trading and risk management, will be headed by recently appointed CEO Michael J. Cyrus. William J. Grealis has been named CEO of the Regulated Businesses unit, which operates all gas and electric transmission and distribution services.
The unit will also manage the regulated businesses of PSI Energy, The Cincinnati Gas & Electric Co. and the Union Light, Heat and Power Co. Larry E. Thomas has been appointed CEO of Power Technology and Infrastructure Services, which will manage a portfolio of emerging energy businesses.
Cinergy also announced that its affiliate, Cinergy Capital & Trading, is in the process of evaluating a project that would add 330 MW to the Midwest region during peak energy usage periods. The four natural gas-fired turbines would be installed in Levan Township near Oraville, IL.
"We are very interested in the Levan Township location as a potential site," said Art Vivar, vice president of business development for Cinergy Capital & Trading. "With the very tight supply of electricity at times of peak use in the Midwest, these units would provide an additional source of clean energy to maintain reliable electric service in the region."
The unregulated affiliate, which is part of the Energy Merchant segment, estimates the project would cost between $150-to-$180 million, with construction beginning during the fall of 2002. Pending environmental approvals and construction permits, the company said it expects to have work completed by summer of 2003.
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