Bankrupt NewPower Holdings, Inc., parent of The New Power Co., signed an agreement with Vectren Source, a non-regulated subsidiary of Vectren Corp., for the sale of NewPower’s current natural gas customers within the Columbia Gas of Ohio and Dominion East Ohio Gas territories.

Under the terms of the agreement, Vectren Source will pay $25 for each customer contract, subject to an adjustment based primarily on natural gas price movements. The estimated purchase price of the approximately 175,000 customer contracts is $4.3 million. In addition, Vectren Source will pay $12.5 million for natural gas inventory. Vectren Source said that ProLiance Energy LLC, a joint venture between Vectren and Citizens Gas & Coke Utility, will provide commodity and risk management services.

NewPower said the transaction will be subject to bankruptcy court and regulatory approvals. The company filed the Vectren Source asset purchase agreement on June 28 for the review and approval of the bankruptcy court under the proposed sales and bidding procedures. The court approval process includes a time period in which other entities may submit higher and better offers.

On June 11, NewPower filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U. S. Bankruptcy Court for the Northern District of Georgia. The company has already found homes for its Texas and Georgia customers. In early June, NewPower said it would transition all of its Texas power customers in the TXU service area to Reliant Energy Retail Services LLC, and its customers in the Reliant service area to TXU Energy Retail Company LP (see Power Market Today, June 11 ). Soon after, Southern Company said it would acquire NewPower ‘s Georgia natural gas customers, the rights to use its risk management system and the company’s Georgia natural gas inventory and accounts receivable for $60 million.

Upon completion of the Vectren Source transaction, NewPower said it expects the cash collateral posted with the local utility Columbia Gas of Ohio, Inc. which ensured NewPower’s fulfillment of obligations in that market, to be released.

“We are very pleased to be in a position to step in and serve this group of NewPower natural gas customers,” said Greg Collins, Vectren Source president. “The Ohio natural gas choice programs are very important to the future of Vectren Source and we look forward to providing outstanding service to these customers for many years to come.”

In gaining NewPower’s Ohio gas customers, Vectren Source — which was formed in 2001 — said the scale added by this transaction better positions it to participate in the planned Vectren Energy Delivery of Ohio customer choice program in Dayton and western Ohio later this year. Earlier in the week, Vectren Energy Delivery of Ohio filed a petition with the Public Utilities Commission of Ohio (PUCO) to allow residential and small business customers to begin purchasing their natural gas from an alternate supplier beginning Dec. 1. The company said the decision to start a natural gas choice program came after months of collaboration with interested parties.

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