Southern Energy Inc. took a giant leap into the Mid-Atlanticpower market yesterday by completing the purchase of 5,154 MW ofpower generation from Potomac Electric Power Company (Pepco) for anet price of $2.65 billion.

“This acquisition, the largest single purchase of assets ever bySouthern Energy, is a big step toward meeting our goal of owning orcontrolling 30,000 MW of capacity in the United States by 2004,”said CEO Marce Fuller. “The location of these assets near keyenergy markets also makes closure of this acquisition exciting.”

Southern Energy expects the acquisition to be accretive toearnings, and has already included the expected positive effect inits previously released 2001 earnings expectation of $1.15 to $1.20per share. The transaction involves four power plants: the 837 MWDickerson Station, fueled by coal, oil and gas in MontgomeryCounty, MD; the 2,423 MW Chalk Point Station, fueled by coal, oiland gas in Prince George’s County, MD; the 1,412 MW MorgantownStation, fueled by coal and oil in Charles County, MD; and the 482MW Potomac River Station, fueled by coal in Alexandria, VA.

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