NGI The Weekly Gas Market Report
FERC last week gave the green light to the merger between NewYork-based Consolidated Edison Inc. and neighboring Orange andRockland Utilities (O&R), moving them a step closer to becomingone of the most formidable electric and gas utility competitors inthe east. The deal, which has been valued at $790 million, isexpected to be completed by mid-year – assuming the regulatoryapprovals of other federal and state agencies are forthcoming.
Based on each company’s power-generation divestiture plans andcertain mitigation commitments, “we believe the proposed mergerwill not have an adverse effect on competition,” the FERC ordersaid [EC98-62]. The combined company will serve nearly 3.3 millionelectric customers and 1.2 million gas customers in southern NewYork, northern New Jersey and northeastern Pennsylvania.
Consolidated Edison Co. of New York (ConEd), a wholly-ownedutility subsidiary of Consolidated Edison, told FERC it expects toauction off most of its generation capacity in three separatebundles by the end of the first quarter. The bundles include: 1)its Arthur Kill generating station and Astoria gas turbines (1,434MW); 2) its Ravenswood generating station and gas turbines (2,168MW); and 3) its Astoria generating station, and Gowanus and Narrowsturbines (1,858 MW). It also proposes to later auction off a fourthbundle (463 MW) of generating capacity in New York City.
O&R, an exempt public utility holding company that serveselectric and gas customers in New York, also is in the process ofdivesting its generation capacity. It expects to have itsgeneration capacity auctioned off in four bundles by the end ofMay. The bundles include: 1) its Bowline Point station; 2) itsLovett station; 3) hydroelectric facilities; and 4) gas turbines.Both ConEd’s and O&R’s generation divestiture plans have beenapproved by the New York Public Service Commission.
Following the merger, the surviving corporation will beConsolidated Edison Inc. O&R will become a wholly-owned utilitysubsidiary of Edison, apart from ConEd. O&R’s Rockland ElectricCo. in New Jersey and Pike County Light and Power in Pennsylvaniawill continue as its subsidiaries.
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