San Diego Gas and Electric Co. is formally asking for nonbindingexpressions of interest for two fossil-fuel power plants and 17combustion turbines by Sept. 10 as the start of a sales plan forits generation assets for which it expects to gain stateregulators’ approval by that same time. Eventually, it expects tosell nearly 2,000 MW of generating capacity by the end of the year,according to a company spokesperson.

Additional purchase power contracts and a 20% interest in SanOnofre Nuclear Generating Plant will be sold in 1999, thespokesperson said. The first stage of the auction process wasstarted this week witha mailing to prospective bidders, andadvertising in national business media. The main assets being soldare two plants, with a combined total 1,671 MW of capacity andrepresent a peak natural gas load of 144 MMcf/d. Both plants arealong the coast-a 965-MW Encina Plant in Carlsbad, CA, 30 milesnorth of San Diego, and the 706-MW South Bay plant. The 17combustion turbines total 253 MW in capacity.

Formal bidding will be begin in September and take place in twostages, with the final bids coming later in the fall. SDG&Eindicated there could be one bidder for all of the assets ormultiple bidders. Morgan Stanley Dean Witter is SDG&E’sfinancial advisor for the sale. Earlier utility generation plantsales in California by Pacific Gas and Electric and SouthernCalifornia Edison have fetched prices above book value for the mostpart.

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