Williams announced that the Internal Revenue Service has issueda favorable ruling on the company’s proposed tax free spin-off ofits communications business to Williams’ shareholders. The rulingwould permit a tax-free distribution of Williams Communications’stock to shareholders in what is commonly known as a spin-offtransaction. Under this form of transaction, each Williamsshareholder would get a proportionate number of WCG shares.Williams currently owns 85% of Williams Communications. It soldabout 15% of Williams Communications last October in public andprivate equity offerings. Last month the company’s board voted tobegin the separation process, which is expected to take about 18months. In a statement, CEO Keith Bailey said the company thoughtthe steps were “the best way to ensure that both our energy andcommunications businesses have the efficient and effective accessto the capital necessary to pursue the substantial growthopportunities that each enjoys.”

Panda Energy International’s project affiliate, Union PowerPartners, has signed an interconnection agreement with EntergyServices Arkansas to flow 2,720 MW from its new electric powerplant, currently under construction in El Dorado, AR, into thesoutheastern grid. When completed, the facility will be the largest100% merchant power plant ever built in the United States. GarryHubbard, Panda’s senior vice president of merchant plantdevelopment, said the agreement allows the facility to interconnectwith Entergy’s bulk transmission system to facilitate sales ofelectricity and ancillary services to wholesale power customers.Approximately 20% of the plant’s capacity — up to 500 MW — wascontracted for last April/March by Dynegy Inc. Construction willstart in late fall and first phase operations of the plant arescheduled to go on line in the spring of 2002.

Dominion Resources is buying the 2,000 MW Millstone NuclearPower Station on Long Island Sound near New London, CT, fromNortheast Utilities for $1.3 billion in cash. The purchase priceincludes $105 million for nuclear fuel. Dominion expects to financethe acquisition initially with a bridge facility and ultimately tofinance it with a combination of debt, equity and possible assetsales. Dominion expects the acquisition to be immediately accretiveto earnings per share, with about 5 cents of accretion in the firstand second years of ownership and accelerated accretion beginningthe third year. “This acquisition supports our broader corporatestrategy to become a major energy provider of choice in theNortheast, Midwest and Mid-Atlantic regions, home to 40% of thenation’s demand for energy,” said Dominion CEO Thos. E. Capps. “Byadding Millstone to our diverse portfolio of generating assets,we’re positioned to increase our market share in New Englandsignificantly. We’ll accomplish this by operating Millstone as asafe, efficient, low-cost generator of base-load power. Thetransaction is expected to close by April 2001. Capps said theplant will raise the company’s generating capacity by about 10% to22,000 MW. Dominion operates the 900 MW North Anna Power Stationand the 800 MW Surry Power Station, two nuclear units in Virginia.

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