Southern Energy Inc. buys generation in California
Southern Energy Inc., a unit of Southern Company, has been selected to purchase electric generating plants with a total capacity of 3,065 megawatts from San Francisco-based Pacific Gas & Electric for $801 million. Earlier today, Southern Energy announced the pending purchase of 1,776 megawatts of capacity in New York from Orange and Rockland Utilities Inc. and Consolidated Edison Inc. for approximately $480 million. Together, these purchases double Southern Energys access to electric generation in the United States, bringing the total to about 9,500 megawatts.
These acquisitions mark a huge step forward in the expansion of our asset base in the United States, said Southern Energy President Tom Boren. We believe that ready access to strategically placed U.S. generation is key to our success as an energy trader and marketer.
Our California purchase means Southern Energy now has generation in each of the regions weve identified as critical to be a successful national energy marketer the California/Desert Southwest, Texas, the Upper Midwest and the Northeast United States, Boren said. Our challenge now is to develop these assets and look for new opportunities to enhance our national presence."
The Pacific Gas & Electric power stations, fueled mostly by natural gas, were sold in a competitive bidding process. Financial closing of the transaction is expected in the second quarter of 1999.
Southern Energy also is considering spending $390 million to upgrade the New York plants and build up to 710 megawatts of new natural gas-fired generation in the state.
Both acquisitions are subject to various regulatory approvals.
Southern Energy Inc. 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 supplies energy in 10 countries on four continents. Its Southern Company Energy Marketing unit provides energy trading, marketing and financial services and other energy-related commodities, products and services to customers in North America. Southern Company Energy Marketing, based in Atlanta, is jointly owned by Southern Energy and Vastar Resources Inc.
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.
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