Energy East Corp. completed its $1.4 billion merger with RGS Energy Group Inc., the parent company of Upstate New York utility Rochester Gas and Electric Corp. Energy East becomes one of the largest energy providers in the Northeast with nearly three million customers, including 1.8 million electricity customers, one million natural gas customers and 200,000 other retail energy customers. Together, RG&E and Energy East subsidiary New York State Electric and Gas serve half of Upstate New York. Energy East now will have annual revenues of $5 billion and more than $10 billion in assets.

“With the closing complete, we can now direct our energy to negotiating long-term electricity and natural gas rate plans for RG&E and further integrating all of our operating companies,” said Wes von Schack, Energy East’s chairman. “RG&E and NYSEG share a common vision for upstate New York, and we are intensely focused on providing outstanding customer service and competitive energy prices. Combining the strengths of these organizations will enable us to continue to efficiently grow our energy infrastructure while creating benefits for our customers and our communities.”

RG&E’s power generation portfolio will help Energy East manage business risks inherent in a transmission and distribution business, the company said at the time the merger was first announced last June (see Daily GPI, June 18, 2001) . “RG&E’s power generation facilities substantially satisfy its customers’ needs, and will help support some of NYSEG’s supply requirements and improve our ability to continue to deliver electricity at stable prices,” von Schack said at the time. “The addition of this generation, our existing long-term power purchase contracts and selective generation expansion by Energy East will give us an even broader range of options to meet the energy needs of upstate New York consumers.”

All of the outstanding shares of RGS Energy will be exchanged for a combination of cash and Energy East stock valued at $1.4 billion in total. The RGS purchase is the company’s fifth northeastern utility purchase in three years. Its other recent acquisitions include Berkshire Energy, parent of Berkshire Gas in Massachusetts; CTG Resources, parent of Connecticut Natural Gas (CNG); CMP Energy, parent of Central Maine Power; and Connecticut Energy.

©Copyright 2002 Intelligence Press Inc. Allrights reserved. The preceding news report may not be republishedor redistributed, in whole or in part, in any form, without priorwritten consent of Intelligence Press, Inc.