Del. utility to sell four power plants

Electric industry

January 20, 2000|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

Conectiv Inc., the Wilmington, Del.-based utility that serves parts of Harford County and most of Maryland's Eastern Shore, said yesterday that it will sell four power plants -- including one in Vienna -- and its interests in two others to a Minneapolis-based utility for $800 million.

Conectiv said it will use proceeds from the sale to finance a buyback of 5 million shares of its stock that began yesterday and will run until 2002. The proceeds will also finance debt repayment and new investments, the company said.

The buyer, NRG Energy, a subsidiary of Northern States Power Co., sells energy to other utilities and power marketers on the wholesale market. Including the acquisition of 1,875 megawatts from Conectiv and other pending acquisitions, NRG's portfolio will include 15,000 megawatts, 8,800 of which are in the Northeast.

Along with the Vienna plant in Dorchester County, the sale includes two plants in New Jersey, one in Delaware, and a share of two plants in Pennsylvania. After the sale, Conectiv will own assets that produce about 2,000 megawatts, with plans to build an additional 650 megawatts.

"The sale takes Conectiv closer to achieving its goal of exiting base-load and nuclear generation and focusing on more growth-oriented areas of the energy market," Howard E. Cosgrove, Conectiv's chief executive officer, said in a written statement.

Part of Conectiv's post-deregulation strategy is to focus on the "mid-merit" generation business. The mid-merit market is composed of power plants that can come online quickly and produce electricity when demand is high, then turn off quickly when demand drops. Mid-merit plants are also flexible, Conectiv said, meaning they can use a number of fuels, such as oil or natural gas.

As part of the deal, which is expected to close during the third quarter of 2000, Conectiv will have a five-year purchase agreement with NRG for 500 megawatts of power to maintain service to its 175,000 customers in Maryland and nearly 1 million others in Virginia, Delaware, Pennsylvania and New Jersey. Along with the power it will continue to produce, Conectiv will buy what it needs on the wholesale market, Cosgrove said.

"Conectiv will continue to provide safe and reliable electric service to our customers," he said.

Yesterday, shares of Conectiv gained 31.25 cents to close at $16.375.

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