Southern Company Energy Marketing, United American Energy enter wholesale tolling agreement
ATLANTA Southern Company Energy Marketing and United American Energy Corp. have entered a fuel-for-electricity agreement for United American Energys strategically located 82-megawatt power plant in Lowell, Mass.
In what is known as a tolling agreement, Southern Company Energy Marketing will have the exclusive right to supply fuel to and receive electricity from the generating plant, which operates primarily on natural gas. Southern Company Energy Marketing will market and trade electricity from the power plant in the New England Power Pool. Exact terms and the value of the deal were not disclosed.
The power plant, known as UAE Lowell Power, is in a prime location for serving the Boston market with a low-cost, efficient power supply. The plant is operated and managed by UAEs eastern business unit, UAE Power Operations Corp. Purchased in April 1999, it is the first merchant power asset acquired by United American Energy.
This energy tolling relationship with United American Energy is a major step forward in our strategy to provide wholesale energy services associated with energy assets in North Americas key power markets, said Jay Catasein, Southern Company Energy Marketings northeast regional vice president. This agreement will provide our trading and marketing operations with access to readily available generation that can be operated in a flexible manner. It also will help us serve more than 300 megawatts of new customer load weve obtained in the last six weeks.
The tolling agreement with Southern provides UAE with a revenue stream based on our operating performance as opposed to energy market fluctuations, said Reed Wills, vice president of project development for UAE Power Operations. We look forward to adding greater value for our investors in the upcoming year through additional merchant plant investments that utilize the tolling agreement concepts.
Southern Company Energy Marketing, based in Atlanta, is jointly owned by Southern Energy Inc. and Vastar Resources Inc. Southern Company Energy Marketing provides energy trading, marketing and financial services and other energy-related commodities, products and services to customers in North America. Southern Energy Inc., a unit of Southern Company, develops, builds, owns and operates power production and delivery facilities and provides a broad range of services to utilities and industrial companies around the world. Southern Energy has operations in 12 countries on five continents.
Southern Company (NYSE: SO), the largest producer of electricity in the United States, is also the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric.
United American Energy Corp. is a privately held company that develops, acquires, owns and manages a wide range of energy assets, principally electric power generating facilities. A nationwide leader in independent energy development, UAE revives troubled projects, develops new facilities and strengthens healthy ventures. UAE has expertise in multiple power generating technologies including gas fire cogeneration, hydroelectric generation and generation powered by coal and solid waste fuels. In addition, UAE is a minority investor in American Ref-Fuel, the largest municipal solid waste-to-energy company in the Northeast.