DPUC Seeks Buyers For CL&P Power Plants; Interested Buyers are Asked to Contact J.P. Morgan.
CL&P will divest its generating assets in accordance with Public Act 98-28, An Act Concerning Electric Restructuring, which will bring electric retail competition to Connecticut beginning in 2000. At that time, the incumbent electric companies will become distribution companies, and the generation and supply of electricity will become competitive.
The power plants, located throughout Connecticut and in western Massachusetts, include 15 fossil plants, representing a combined installed capacity of 2,493 MW, and 3 Hydro systems, comprised of 13 hydro plants and one fossil plant, representing a combined installed capacity of 1,329 MW. The hydroelectric capacity being sold includes the 1,179 MW Northfield Mountain System.
The bidding for the Assets will be conducted in two rounds. In Round One, interested bidders will be invited to submit non-binding bids for some or all of the Assets. Certain bidders will then be offered the opportunity to engage in detailed due diligence investigations in Round Two. Round Two bidders will be invited to submit a binding bid for some or all of the Assets. J.P. Morgan intends to identify a final, qualified buyer or buyers for the power plants and arrange for the signing of final purchase contracts by mid-1999.
Parties interested in bidding on the Assets should contact John Lynch of J.P. Morgan at (212) 648-8210. All questions relating to participation in the sale process must be submitted to J.P. Morgan.
On Wednesday, February 3, the DPUC approved CL&P's proposed plan for the divestiture of its generating assets. Connecticut's electric restructuring law permits an unregulated affiliate of a regulated electric company to bid on the assets of its regulated affiliate and provides that the DPUC shall retain a consultant to conduct the auction. The DPUC has appointed certain members of its staff to the Utility Operations and Management Analysis unit ("UOMA") to oversee J.P. Morgan. The Department selected J.P. Morgan as its advisor and provided that the Department will oversee J.P. Morgan.
CL&P is a wholly owned subsidiary of Northeast Utilities ("NU"). NU is the parent of a number of companies comprising the Northeast Utilities System and is not itself an operating company. The NU System, which also includes Public Service Company of New Hampshire ("PSNH") and Western Massachusetts Electric Company ("WMECO") has traditionally furnished franchised retail electric service in Connecticut, New Hampshire, and western Massachusetts. In addition to their retail electric service, CL&P, PSNH, WMECO, and Holyoke Water Power Company ("HWP") (including its wholly owned subsidiary, Holyoke Power and Electric Company), the System companies together furnish wholesale electric service to various municipalities and other utilities and participate in limited retail access programs, providing off-system retail service. The NU System serves about 30 percent of New England's electric needs and is one of the 25 largest electric utility systems in the country, as measured by revenues.