NGC Corp. struck its first wholesale electric marketing alliancewith an electric utility in a deal with Florida Power Corp. (FPC).The alliance would capitalize on developing wholesale energymarkets in Florida and other regions, NGC said. It combines theenergy marketing, trading and risk management skills of NGC withthe current power marketing capabilities and over 8,500 MW of powersupply assets of Florida Power. The alliance will allow NGC and FPCto offer wholesale customers in Florida and the southeast a fullspectrum of wholesale power services, and maximize theopportunities for commercial management of FPC’s generation assets.

“This landmark alliance between NGC and Florida Power Corp. isthe first major combination between a utility and a marketer tomarket electricity in our industry,” said NGC Senior Vice PresidentStephen W. Bergstrom. “NGC has a vision of capitalizing on ourunique strengths to build a premier group of regionally focusedalliance relationships.”

An alliance in Florida is particularly attractive to NGC as itgives the marketer access to generation within the state. It isdifficult to get power into Florida, an NGC spokeswoman explained.”In order to be an effective marketer, you have to have generationcapabilities there.” FPC is a Florida Progress Corp. company.

Larry Crowley, an analyst with Jefferies & Co. in Houston,noted the Florida alliance fits well with NGC’s strategy ofleveraging its wholesale strengths with a retail partner. “Also,this kind of alliance allows somebody like Florida Progress toexport more power into the surrounding regions because, clearly,their partner, NGC in this case, has the ability to effectivelytrade electric power and natural gas on a national basis.”

NGC is taking a longer view with its Florida deal, Crowley said.”What we see is more companies trying to position themselves forwhat may happen two, three [years] and maybe even longer down theroad. Given the Southeast market in general — [if you fail] to doa deal with Southern Co., you probably want to go into the nextstrongest competitor, and that would be one of the Floridacompanies. I think they are clearly positioning themselves for themuch broader deregulation that would occur in the Southeast.”

Florida Power CEO Joe Richardson said, “This alliance willexpand our access to national wholesale markets, providingshareholder benefits through increased sales, and customer benefitsthrough more efficient utilization of competitively-priced powerand fuels.”

Personnel from each company will be co-located on the tradingfloors of NGC in Houston and FPC in St. Petersburg FL. From bothlocations, power marketing traders will access national wholesalefuels and energy markets information. Headquartered in St.Petersburg Florida Power for nearly a century has served centraland northern Florida, and provides energy to about 4.5 millionpeople within its service area, which covers 32 of the state’s 67counties. Florida Power owns or manages more than 8,500 MW ofgeneration capacity, with generation assets throughout central andnorth Florida.

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