July 11, 2002 — NRG Energy informed the Federal Energy Regulatory Commission (FERC) that it cannot accept the condition the Commission imposed on its approval of NRG’s intended purchase of certain generating assets from FirstEnergy Corp.
NRG also said that it needs more time to analyze a clarification to the FERC approval proposed by FirstEnergy and its potential impacts on NRG and its future operation of those generating assets.
In an order issued on July 2, 2002, the Commission approved the purchase, provided that NRG agree to comply with specific terms of a Merger Settlement Agreement that FirstEnergy entered into with the City of Cleveland at the time the merger that created FirstEnergy was approved in 1997. The Commission said NRG must agree to terms that were designed to insure that the FirstEnergy merger would not adversely affect transmission of electricity to Cleveland.
NRG first became aware of the Merger Settlement Agreement when the City of Cleveland filed its protest and intervention in the current proceeding. NRG is not a party to the Merger Settlement Agreement and did not agree to assume any of its obligations when it agreed to purchase the generating assets.
FirstEnergy on July 3, 2002 filed with the Commission a motion asking it to clarify that the condition would impose on NRG the obligation only to “notify” FirstEnergy and the City of Cleveland whenever it intended to remove one of the generating plants from service. In its subsidiaries’ filing recently with the Commission, NRG stated that it had not had sufficient time to study its impact on post-closing operation of the plants, since the issues raised by that proposal and the Merger Settlement Agreement are complex and, more importantly, are completely new to NRG.
NRG also informed the FERC that it has asked FirstEnergy to provide certain information relating to the Merger Settlement Agreement so that it may be in a position to make an informed determination as to whether any modification of the Order, short of complete removal of any condition, would be acceptable. NRG intends to work diligently with FirstEnergy to determine promptly what conditions, if any, will be acceptable to NRG. NRG informed the Commission that it will make its views on the FirstEnergy proposal known to the Commission “at the earliest possible time.”
Xcel Energy (NYSE:XEL – News) is a major U.S. electricity and natural gas company with regulated operations in 12 Western and Midwestern states. Formed by the merger of Denver-based New Century Energies and Minneapolis-based Northern States Power Co., Xcel Energy provides a comprehensive portfolio of energy-related products and services to 3.2 million electricity customers and 1.7 million natural gas customers through its regulated operating companies. In terms of customers, it is the fourth-largest combination natural gas and electricity company in the nation. Company headquarters are located in Minneapolis. More information is available at www.xcelenergy.com.