11 Feb 2002 – Innogy, the UK electricity group has emerged as a possible buyer for Enron’s main physical asset in the UK – the Teesside power plant in Northeast England. A spokesman for Innogy confirmed today that a bid had been lodged for the plant in which Enron has a 42 per cent stake.
Innogy said that buying Enron Power operations Limited (EPOL), a service subsidiary that manages and operates the 1875 MW gas-fired facility, would enhance the flexibility of the company’s generation business. “It is a gas-fired plant, so it is quite useful,” the spokesman added.
EPOL is currently in administration as part of the Enron chapter 11 filing and PricewaterhouseCoopers, the administrators have called a creditors meeting on Friday in London.
Innogy is the largest single purchaser of power from the plant and believes it can operate it more efficiently. Innogy wants to restructure power purchase agreements between the plant and its customers to give it flexibility to sell into the open market.
Separately, U.S. electricity and gas company Utilicorp United Inc. (UCU) is set to acquire a 27 per cent stake in Teesside when it completes its purchase of FirstEnergy Corp.’s (FE) U.K. distribution unit Midlands Electricity. A Utilicorp spokesman said in December that his company would consider buying out Enron’s share in the plant.
The remaining 30 per cent stake in Teesside is divided equally between Western Power Distribution, a subsidiary of Mirant Corp. (MIR), and U.K. Northern Electric PLC, which is majority-owned by Berkshire Hathaway (BRKA) unit MidAmerican Energy Holdings Co. Neither company could immediately be reached for comment.
Shareholders in the Teesside operation have priority over other bidders. Estimates for Enron’s stake are in the range of £:150m-£500m ($213m-$710m).