The foreign invasion of the U.S. electric utility market got abig shot in the arm yesterday when the Federal Energy RegulatoryCommission approved two separate transactions valued at $10-$11billion.
The Commission okayed ScottishPower’s acquisition of Portland,OR-based PacifiCorp for an estimated $7-$8 billion, as well as thepurchase by Britain’s National Grid Plc, the world’s largestprivately owned independent transmission company, of New EnglandElectric System (NEES) of Westborough, MA, for $3.2 billion. Itfound that neither merger deal posed any market-power concerns.
“These transactions represent the first major mergers anddispositions of U.S. public utilities and foreign companies thathave come before the FERC, yet they present little controversy,”said Commissioner William Massey. “There are no competitiveconcerns raised by the transactions because the merging partners donot sell in the same geographic markets as the utilities they areacquiring.”
The growing foreign interest in U.S. utilities, Massey noted,was to be expected. “U.S. companies have been increasingly activein the foreign investment market. Investments by U.S. utilities[have] exploded….. So it is no surprise that foreign companiesare taking an interest in U.S. assets as well.”
In addition to FERC, the ScottishPower-PacifiCorp deal has beenapproved by Britain’s regulatory authorities. It still, however,requires the necessary approvals from the Securities and ExchangeCommission and regulators in the six western states served byPacifiCorp, which include Oregon, California, Washington, Utah,Idaho and Wyoming.
The California Public Utilities Commission already has given anod to the deal, and the staff for the Washington Utilities andTransportation Commission recommended on Tuesday that regulatorsapprove the merger next fall. In Oregon, where the merger faces itsbiggest hurdle, the staff of the state’s Public Utility Commissionsaid it is continuing to work with ScottishPower to reach asettlement on key merger-related issues, which could clear the wayfor a vote on the merger by either September or October.
The National Grid-NEES transaction still requires the nod ofstate regulators in Massachusetts, New Hampshire and Rhode Island,as well as clearances from the SEC and Nuclear RegulatoryCommission.
Under both deals, the U.S. utilities – PacifiCorp and NEES -would become subsidiaries of their respective foreign owners.PacifiCorp serves about 1.4 million customers in the six westernstates, while NEES and its utility affiliates serve 1.3 millioncustomers in the New England area.
Separately, FERC yesterday also approved the merger of CentralIllinois Light Co. (CILCO), a Midwest electric and gas utility,with AES Corp., a major power generation and distribution firm withoperations worldwide. It concluded that the deal “will notadversely affect competition” in their respective markets.
CILCO, a wholly-owned subsidiary of CILCORP Inc., provideselectric services to about 193,000 customers in central and eastcentral Illinois, and retail gas service to approximately 202,000customers. It also owns coal-fired and gas-fired generationfacilities.
AES is engaged principally in the development, ownership andoperation of electric generating plants and electric distributionfirms. It owns and/or operates a diverse portfolio of power plantsworldwide with a total capacity of 23,656 MW.
©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |