USGen completes financing for Hermiston Generating Plant.

BETHESDA, Md.--(BUSINESS WIRE)--Dec. 7, 1994--U.S. Generating Co. (USGen), developer and manager of the Hermiston Generating Plant, announced today that it has completed financing for the 474-megawatt, natural gas cogeneration project, now under construction in northeast Oregon.

The project finance transaction, which totaled $351 million, includes $328 million in capital and financing costs, plus various letter of credit and working capital facilities. Credit Suisse underwrote the entire financing on behalf of the project owner, USGen affiliate Hermiston Generating Co., L.P. (HGC). Affiliates of PG&E Enterprises and Bechtel Enterprises Inc., USGen's parent companies and the general partners in HGC, have committed equity amounts of approximately $82 million.

"The fact that this financing closed only 13 months after the power supply contract was signed with PacifiCorp clearly demonstrates USGen's ability to develop and finance a major project successfully, in a very competitive market environment," said Jeffrey J. McParland, USGen vice president of project finance. "This success also underscores Credit Suisse's capabilities and track record in the independent power industry."

The Hermiston plant, which is located next to the Lamb-Weston potato processing facility about three miles southwest of the City of Hermiston, will sell electrical capacity and dispatchable electrical energy to PacifiCorp, beginning in mid-1996. The power will be delivered to the Bonneville Power Administration's McNary Dam substation over an upgraded transmission line that will be owned and operated by Umatilla Electric Cooperative. The cogeneration plant also plans to provide up to 50,000 pounds of steam per hour to Lamb-Weston.

The project is an Exempt Wholesale Generator (EWG) under the Energy Policy Act of 1992. It has received its EWG determination from the Federal Energy Regulatory Commission (FERC), which has also accepted for filing the contract rates with PacifiCorp.

The project will use up to 84,700 MMBtu of natural gas per day to fuel two General Electric Frame 7FA combustion turbine generators. These generators will operate in a combined-cycle mode with two heat recovery steam generators and two steam turbine generators to provide substantial gains in efficiency over traditional steam-electric generating technology.

The natural gas will come from four suppliers--Chevron USA, North Canadian Marketing, CanStates Gas Marketing and Home Oil Company Limited. Approximately 80 percent of the gas requirements are from CanStates, Home Oil and Chevron, and were subject to licenses from the Canadian National Energy Board (NEB). The NEB issued those licenses on Nov. 30, 1994.

The natural gas will be transported on a firm basis from western Canadian production fields to the Hermiston area through the Nova Corp., Alberta Natural Gas and Pacific Gas Transmission pipelines. The local distribution company, Cascade Natural Gas will deliver the volumes to the site via a new dedicated lateral that will be constructed by Cascade prior to operations.

USGen is one of the nation's leading independent power producers. Currently, it has 13 electric power plants in operation or under construction, totaling 2,238 megawatts of generating capacity. Together, these plants represent an investment of $4.2 billion.

CONTACT: U.S. Generating Co., Bethesda, Md.

Jack Hawks, 301/718-6805