Hoping to benefit in both efficiency and cost savings, CompaqComputer Corp. inked an agreement with Enron Corp.’s Enron EnergyServices yesterday, a deal in which Enron will manage theelectricity, natural gas and energy-related management services forCompaq’s facilities in Texas, California and Massachusetts.Financial details for the five-year agreement were not disclosed.The deal between the two Houston-based corporations adds to thegrowing list of energy service management contracts Enron has inkedduring the past few years, which has ramped up this year. In earlySeptember, Enron Energy Services secured a 10-year $1 billionenergy management service agreement with Starwood Hotels andResorts Worldwide (see Daily GPI, Sept. 7). The energy services armof the marketing giant remains on track to reach its goal of $16billion in agreements this year, nearly double 1999’s total of $8.5billion. That’s up from $3.8 billion in energy agreements in 1998(see Daily GPI, May 31).
FuelCell Energy, Inc. announced yesterday that it has formed analliance with Enron North America. The companies plan to worktogether to develop and market FuelCell Energy’s Direct FuelCellproducts, focusing on state renewable and energy conservationprograms. “Targeting state-sponsored renewable programs and energyconservation opportunities will accelerate the commercialization ofour Direct FuelCell products in these ‘early adopter’ markets,”said FuelCell Energy CEO Jerry Leitman. In connection with thedeal, Enron has purchased $5 million in FuelCell Energy commonstock and has the option to purchase up to 1.3 million more shares.Terms of the additional purchases have been negotiated between thecompanies and are contingent upon the sales of 55 MW of powergeneration utilizing FuelCell Energy products. “This transactionenables us to reach the developing markets for clean energy andrenewable energy, which may be served through distributedgeneration products, such as fuel cells and other emergingtechnologies,” said Dave Delainey, president and chief executiveofficer for Enron North America. Danbury, CT-based FuelCell,formerly Energy Research Corp., has developed a technology thateliminates external fuel processing to extract hydrogen from ahydrocarbon fuel. This results in a product whose cost, combinedwith high efficiency, simplicity and reliability, results inproduct advantages for stationary power generation. The company hasdeveloped Direct FuelCell power plants with nominal ratings of 300kW, 1.5 MW and 3 MW.
Southern Company and subsidiary Southern Energy Inc. announcedgross proceeds of $1.81 billion from the initial public offering ofSouthern Energy common stock and a concurrent securities offeringyesterday. Southern Energy sold at $22 per share 66.7 millionshares of common stock, which included 8.7 million shares soldafter underwriters exercised an overallotment option. The grossproceeds to Southern Energy from the IPO were $1.467 billion. The66.7 million shares of common stock represent 19.7% of the 338.7million shares outstanding. Southern Energy also sold at $50 persecurity 6.9 million shares of convertible trust preferredsecurities, including 900,000 securities sold after underwritersexercised an overallotment option. The convertible trust preferredsecurities were priced to yield 6.25% with a conversion price of$27.50 per share. The gross proceeds to Southern Energy from theoffering of the convertible trust preferred securities were $345million.
Devon Energy said it has brought about 51 MMcf/d of new gasproduction on stream from two new wells on Eugene Island Block 156offshore Louisiana in about 82 feet of water. Devon is the operatorand has a 100% working interest. The wells were drilled in thesecond quarter and construction of a production platform andfacilities was completed in August. Both wells are producing fromabout q 100-foot interval near 14,000 feet deep.
Constellation Power Source said it plans to build an 800 MW,combined-cycle power plant in Seguin, TX, located between SanAntonio and Austin. Commercial operation of the Rio Nogales PowerProject is slated to begin in June 2002. Rio Nogales is the fourthpower plant Constellation has announced it will build this year asthe company continues to seek opportunities to meet customer demandin national wholesale power markets. Constellation Power SourcePresident Charles W. Shivery noted the Austin-San Marcos-SanAntonio region of Texas is one of the fastest growing areas in theU.S. The $340 million plant will feature a combined-cycle facilitywith three natural gas turbines. The exhaust heat generated by theturbines will be captured and used to make steam to power a fourthunit, a single steam turbine. Site clearing began for the RioNogales project in July 2000, and multiple water supply sources forthe plant are now being secured. The 30-acre site includes existingtransmission lines that serve the San Antonio and Austin regionalmarkets, the Dallas market to the north, and Houston and CorpusChristi markets to the east and south. The plant will also be ableto serve the Lower Colorado River Authority’s service area.
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