Orion gains 71 hydroelectric plants

$425 million deal with Niagara Mohawk

Power industry

August 03, 1999|By Mark Guidera | Mark Guidera,SUN STAFF

Orion Power Holdings, a joint venture of the Baltimore Gas and Electric Co. and investment powerhouse Goldman Sachs & Co., completed its $425 million purchase of 71 hydroelectric generating plants yesterday.

All of the plants are in upstate New York and were owned by Niagara Mohawk Power Corp. of Syracuse, N.Y. The plants generate enough megawatt hours of electricity to serve 200,000 homes.

Lori Scheiner, a spokeswoman for Orion, said the acquisition is part of the company's strategy of "building a portfolio of nonnuclear electric-generating stations throughout the United States."

Under the deal, announced in December, Niagara will buy more than 2 million megawatt hours of electricity annually from Orion until September 2001.

The deal should result in about $81 million a year in revenue for Orion.

Any excess energy generated by Orion's plants may be sold on the open market.

After 2001, Constellation Power Source, which is owned by the parent of BGE, will take over responsibility for marketing energy produced by the plants.

The acquisition is the second Orion has completed. It bought a gas fired power station in Syracuse this year.

Last month, Orion won approval from New York regulators to purchase three New York City power stations -- referred to as the "Astoria bundle" -- from Consolidated Edison Co. for $550 million. Final approval for that deal is expected in the next several weeks.

Niagara Mohawk said it would use proceeds from the sale to retire debt and reorganize its finances as it seeks to compete solely as a distributor of electricity rather than a producer-distributor.

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