Attempting to meet steep generation acquisition goals set by itsCEO for 1999, El Paso Energy recently bought a 49% ownershipinterest in East Coast Power, a subsidiary of Enron Corp. Terms ofthe deal were not disclosed. Enron still maintains control of thecompany with its 51% interest. El Paso said this deal is the firstdomestic power alliance between the two companies.

East Coast Power is a managing company for three cogenerationpower plants in New Jersey. The company was formed when EnronCapital and Trade Resources and a partner acquired the plants fromCogen Technologies Group last February for $1.1 billion. Theplants, which are designated as “qualifying facilities” under thePublic Utilities Regulatory Practices Act of 1978, produce a totalof 1,037 MW for the New York and New Jersey markets.

“Enron has always been interested in taking on a strategicpartner for these plants,” said Traci Warner, a spokesperson forEast Coast Power. “It was important that Enron still maintained themanaging position for the plants, but we also wanted anothercompany with a strong track record in power marketing to take somefinancial responsibility.”

El Paso bought the interest in East Coast in an attempt to meetCEO William Wise’s goal of owning 9,000-10,000 MW of powergeneration by the end of 1999. “With this deal, we’ll have around3,000 MW throughout the U.S. and we are definitely going to beactive in looking for more,” said Paula Delaney, a spokesperson forEl Paso Energy. “Although the purchases will be market dependent,the East has the most dynamic market right now. I also think theSoutheast is an area where generation assets will be available.”Delaney added that once the impending merger with Sonat iscomplete, the combined company’s generation base will be bolsteredsignificantly.

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