US utilities auction assets
Consolidated Edison Company has announced the beginning of the auction process for the sale of its fossil fired power generating stations in New York City. The announcement came shortly after AES sealed a deal to buy six coal fired plants from NGE Generation in New York, and Edison International agreed to pay $1.8bn for a coal fired plant near Pittsburgh.
Consolidated Edison`s assets up for sale total 5500 MW of capacity which will be divided into three bundles: Ravens- wood, Astoria and Arthur Kill. Each will be sold to separate third parties to encourage the development of competition in New York`s generating market. The auction process will take five months, with the winning bids announced in early 1999. Con Edison affiliates will not participate in the auction.
NGE Generation, an affiliate of New York State Electric & Gas Corp. (NYSEG), agreed in early August to sell its six coal fired plants to AES Corp. for $950m.
These facilities represent the bulk of NYSEG`s coal fired capacity and were auctioned as part of the utility`s restructuring plan. The facilities are among some of the lowest-cost units in the New York power pool and most will be run as base load units.
Also in early August, Edison International agreed to pay $1.8bn for a 1884 MW coal fired plant owned by GPU Inc. and Energy East Corp. The plant has direct high voltage connections to the New York power pool as well as the grid covering Pennsylvania, New Jersey and Maryland.
These acquisitions are expected to strengthen the positions of both AES and Edison International in the northeast where electricity markets are beginning to deregulate.