Sale of NiMo's Oswego Station completed, nets utility $75 million

CNY Business Journal (1996+), Nov 05, 1999

OSWEGO - NRG Energy, Inc., a wholly owned subsidiary of Northern States Power Company (NYSE: NSP), announced on October 25 that it had completed the acquisition of the 1,700-megawatt (MW) oiland gas-fired Oswego Generating Station from Niagara Mohawk Power Corp., a wholly owned subsidiary of Niagara Mohawk Holdings, Inc. (NYSE: NMK), and Rochester Gas & Electric Corp., a wholly owned subsidiary of RGS Energy Group (NYSE: RGS). NRG Energy paid a total of $85 million, which includes an assumed obligation and adjustments for fuel and other items, for the Oswego Station.

Niagara Mohawk's 88-percent ownership of the plant brings it $75 million of the total price, after adjustments for fuel inventory and similar items. RG&E is a 24-percent owner of one unit. Under a transition power contract in place through June 2003, Niagara Mohawk will purchase electricity generated by the Oswego Steam Stations at negotiated prices.

In June 1999, NRG Energy acquired the baseload, coal-fired Dunkirk and Huntley stations, totaling 1,360 MW of generating capacity, from Niagara Mohawk, and the gas- and oilfired Arthur Kill Station and Astoria Gas Turbine sites, totaling 1,456 MW of generating capacity, from Consolidated Edison Company of New York. In July 1999, NRG Energy announced the execution of a binding purchase agreement with Connecticut Light & Power to acquire four oiland gas-fired generating stations and remote gas turbines totaling 2,235 MW of generating capacity. Including the Oswego acquisition, NRG Energy owns, or has executed agreements to acquire, plants representing in excess of 4,500 MW of capacity in the New York Power Pool and more than 2,400 MW in the New England Power Pool.

The Oswego Station is located on a 93-acre site in Oswego, along the south shore of Lake Ontario. The facility consists of two 850MW oil-fired operating units and four retired units. One of the operating units is also capable of generating up to 150 MW utilizing natural gas. The acquisition includes an oiltank farm and associated rail facilities which give the Oswego facility an alternative yearround fuel delivery system, as well as substantial additional off-site fuel-oil storage.

NRG Energy is a leading independent power producer, specializing in the development, construction, operation, maintenance, and ownership of lowcost, environmentally responsible power plants. Established in 1989, NRG Energy has a portfolio of projects in the U.S., Europe, the Pacific Rim, and Latin America. The company is involved in more than 21,000 MW of projects utilizing such diverse fuel sources as natural gas, oil, coal and coal-seam methane, biomass, landfill gas, and hydro, as well as refuse-derived fuel and geothermal energy.

Divestiture of Niagara Mohawk's generating assets was one of the key elements of the company's PowerChoice plan. To date, the company has completed the sale of its two coal-fired electric generating stations and its 71 hydroelectric generating stations. It also has agreements in place to sell its Albany Steam Station, its Nine Mile Point Nuclear Unit One station, and its 41-percent ownership of Nine Mile Point Nuclear Unit Two. The company also plans to sell its share of the Roseton Station, an oil/gas facility located in Newburgh.