Completing an asset sell-off started last month, ConsolidatedEdison Co. announced Baltimore, MD-based Orion Power Holdings asthe winning bidder in the auction for three New York citygenerating facilities. Orion’s winning bid was $550 million. MorganStanley Dean Witter advised Con Edison on the sale. Orion officialssaid the deal will close by mid-1999.
Collectively called the Astoria bundle, the facilities includethe Astoria generating station in Queens and the Gowanus andNarrows gas turbines in Brooklyn. They produce a total of 1,855 MW,which represents 25% of generating capacity in New York City. TheAstoria bundle sale marks Con Edison’s exit from in-city electricgeneration. Orion Power Holdings said it will offer employment toall Con Edison employees working at the facilities being sold andwill honor all union contracts.
Early last month, Con Edison auctioned off its 2,168 MWRavenswood bundle to KeySpan Energy and its 1,456 MW Arthur Killbundle to NRG Energy (see Daily GPI, Feb 1, 1999). Combined with thislatest sale, Con Edison received a total of $1.65 billion for thethree bundles. Con Edison said this figure is about two times thebook value for the assets. The company said it expects to use thefunds to finance its planned acquisition of Orange and RocklandUtilities Inc. for $790 million (See Daily GPI May 12, 1998). It willalso use the money to complete its $1 billion stock buybackprogram.
The auctions resulted from an agreement Con Edison made with NewYork State’s Public Service Commission in 1997 to attempt to bringcompetition to New York City’s energy market.
Orion Power Holdings is an electric generation asset holdingcompany formed in 1998. Its major investors include GS capitalPartners II, an investment fund managed by Goldman, Sachs &Co., and Constellation Power Source, a Baltimore Gas & Electricsubsidiary.
Besides the Astoria bundle, Orion also owns a 105 MW plant inSyracuse, NY, and a 661 MW Niagra Mohawk Hydro plant in Up-StateNY. “The Astoria is our first major urban generation acquisition,”said Laurie Schiner, an Orion spokeswoman. “In the future, we hopeto develop a portfolio of electric generating assets nationwide.”
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