Almost four months after its takeover bid of NewPower Holdings Inc. was scuttled due to unfavorable court rulings, Centrica plc announced last week that its subsidiary, Energy America LLC., has entered into an agreement to acquire the Ohio and Pennsylvania natural gas customers and other specified assets of NewPower for an estimated total consideration of $21.85 million. The United States Bankruptcy Court for the Northern District of Georgia accepted Centrica’s offer over Vectren Corp.’s late June offering of $16.8 million for the company’s Ohio gas customers (see NGI, July 8).

In addition to the company’s Ohio and Pennsylvania customers, the court also approved the sale of NewPower’s other customer portfolios to successful bidders. The court acknowledged that Dominion Retail, Inc. and Interstate Gas Supply, Inc. were successful bidders for some of NewPower’s remaining natural gas and electric customers in Ohio, Pennsylvania and Michigan.

The court also approved the sale of NewPower’s natural gas customers in Georgia to Southern Co., as per terms of a previously announced agreement. Southern Co. signed a letter of intent in June to acquire the Georgia customers currently being served by The New Power Company (TNPC), the rights to use its risk management system and the company’s Georgia natural gas inventory and accounts receivable for $60 million (see NGI, June 17).

The bankruptcy court also approved the turn-back of customers not subject to these transactions to local utilities or the provider of last resort.

Under the Energy America transaction, Centrica’s subsidiary will purchase NewPower’s 215,000 gas customers for $8.25 million. Energy America said it has also agreed to acquire other specified assets, including gas inventory and certain computer systems relating to the customers being acquired, which as of late last month had an estimated value at completion of $13.6 million.

Energy America said the final price is subject to an adjustment for any shortfall in customers and the projected forward price curves for gas between June 13 and completion, and to certain other adjustments. The transaction is also subject to approvals by regulatory agencies.

“We are pleased to have reached this agreement to acquire additional customers in key U.S. markets in which we already operate,” said Deryk King, CEO of Centrica’s North American operations. “This is an excellent outcome for these customers who will see no interruption in service and have the assurance of a financially strong reliable supplier that is committed to customer service and here for the long-term. We look forward to a enduring relationship with these new customers and our existing Ohio and Pennsylvania customers.”

Energy America said it will honor the existing contracts of NewPower’s gas customers in Ohio and Pennsylvania, and upon completion, will migrate the acquired customers to its Energy America brand.

In announcing that Vectren was outbid by Energy America, Vectren Source President Greg Collins said, “During the bid process we made enhancements to our offer within the constraints of our business model. Although we are disappointed that we will not be able to serve these specific customers, we continue to be committed to expanding our presence in Vectren’s Midwest footprint including Columbia of Ohio and Dominion East Ohio territories.”

Vectren Source said its offer for the customer contracts will remain open for a limited period of time should the sale to Energy America not be completed. In addition, if and when the Energy America transaction closes, Vectren Source will receive a breakup fee to cover expenses.

Centrica Plc’s bid to take over NewPower Holdings Inc. outside the bankruptcy proceedings ended in late March after a New York court overseeing Enron Corp.’s bankruptcy case refused to protect Centrica from future liability related to the bankrupt trader (see NGI, April 1). NewPower had been an Enron subsidiary for less than 50 days before it was spun off as an independent company. The order protecting Centrica from liability claims was considered necessary for it to complete a tender offer for NewPower shares.

In early June, NewPower Holdings Inc. and its subsidiaries TNPC Holdings and The New Power Co., filed voluntary petitions for Chapter 11 bankruptcy (see NGI, June 17). The companies had been in financial straits since their majority stakeholder, Enron, filed for bankruptcy.

A few days before filing for bankruptcy, NewPower said it would transition all of its Texas retail customers — almost 80,000 residential and business customers statewide — to TXU Energy Retail Co. LP and Reliant Energy Retail Services. The bankruptcy court has already approved the transitions.

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