For Immediate Release: September 28, 1998
Contact: PP&L Global -- Paul Champagne (703) 293-2603
PP&L Resources -- Dan McCarthy (610) 774-5758
Bangor Hydro -- Robert S. Briggs, President & CEO
(207) 941-6607
-- Carroll R. Lee, Sr. Vice
President & COO (207) 941-6663
PP&L GLOBAL TO ACQUIRE GENERATING ASSETS AND TRANSMISSION
RESOURCES OF BANGOR HYDRO-ELECTRIC COMPANY
BANGOR, MAINE -- Bangor Hydro-Electric Company (NYSE: BGR)
and PP&L Global, Inc., a subsidiary of PP&L Resources, Inc.
(NYSE: PPL), have reached an agreement for PP&L Global to
purchase most of Bangor's electric generating assets and certain
transmission rights.
Under the agreement, PP&L Global will purchase 100 percent
of Bangor s hydroelectric assets, as well as its interest in an
oil-fired generation facility. The assets have a total base load
capacity of 89.2 megawatts.
PP&L Global will purchase the assets for $89 million. The
company expects to finance this acquisition with 50 percent debt
and 50 percent equity. The closing, which is subject to the
approval of the Maine Public Utilities Commission and the Federal
Energy Regulatory Commission, as well as certain third-party
consents, is expected to occur by mid-1999.
Robert D. Fagan, president of PP&L Global, said the
acquisition of these assets, which includes associated
transmission resources, is another step in PP&L Resources'
strategy to establish a competitive position in the New England
generation market by providing for potential retail customer
sales growth as well as energy trading and marketing
opportunities.
"These hydro facilities are of strategic value to PP&L
Global," Fagan said. "These assets represent some of the last
hydro facilities available in the New England Power Pool
(NEPOOL). Hydro facilities provide a long-term opportunity due to
their stable cost characteristics versus other generating assets
in the Northeast. Furthermore, hydro assets meet the green power
criteria' established by the Maine legislature, which mandates an
environmentally compatible component to all retail sales. We look
forward to being good stewards of natural resources in the state
of Maine."
"This is an important milestone in Bangor Hydro's electric
utility restructuring efforts," said Robert S. Briggs, president
and chief executive officer of Bangor Hydro. Briggs indicated
that most of the proceeds to be received by Bangor Hydro will be
used to reduce debt. "Our financial condition will be
strengthened, and our customers will benefit because the
successful sale should mean lower rates for the transmission and
distribution business," he said.
The agreement is the result of Bangor Hydro's auction of its
generation and generation-related assets in accordance with
Maine's electric utility restructuring law, which took effect
September 1997. Under the law, all of Maine's investor-owned
electric utilities must divest all of their non-nuclear
generation assets and generation-related businesses before March
1, 2000.
The new law is intended to create an open market in which
retail consumers will choose their own providers of the
electricity that flows through the wires. The management of the
"wires" or transmission and distribution business will remain the
regulated function of the existing utilities. Reed Consulting
Group assisted Bangor Hydro in the auction.
In addition to the hydro stations, PP&L Global has agreed to
purchase Bangor Hydro's 8.33 percent interest (52 megawatts) in
Wyman Unit 4, a 620-megawatt oil-fired power plant in Yarmouth,
Maine.
"The Wyman plant provides PP&L Global with an excellent fuel
hedge and further improves the fuel diversity we hope to achieve
in NEPOOL, along with our development of a natural gas-fired
power plant in Wallingford, Conn.," said Fagan. The New England
Power Pool includes the states of Connecticut, Massachusetts,
Rhode Island, New Hampshire, Vermont and Maine.
The eight hydro stations being sold by Bangor Hydro range in
size from 2 megawatts to more than 13 megawatts and are located
along the Penobscot River Basin and Union River in Maine. PP&L
Global plans to manage the hydro facilities with PP&L Global and
transferred Bangor Hydro employees. As part of its strategy to
further establish its presence in New England, PP&L Global will
likely establish an office in the region.
PP&L Global also is acquiring Bangor Hydro's expansion
rights for a second high-voltage transmission line from Bangor,
Maine, to New Brunswick, Canada, and Bangor Hydro's rights as a
participant in the regional utilities' agreements with Hydro
Quebec.
Bangor Hydro-Electric Company is the second largest electric
utility in Maine. It serves a population of about 192,000 in an
area encompassing about 5,200 square miles in eastern and east
coastal Maine. The company is a member of NEPOOL and is
interconnected with other New England utilities to the south and
with the New Brunswick Power Corporation to the north.
PP&L Global is headquartered in Fairfax, Va. With the
addition of Bangor Hydro's generating assets, PP&L Global now has
about $725 million in investments and commitments around the
world. Domestically, PP&L Global also is developing a 500-
megawatt natural gas-fired power plant in Wallingford, Conn., and
a gas-fired power plant near Kingman, Ariz.
PP&L Global also has ownership interests in, and
participates in the management of, electric distribution
companies in the United Kingdom, Chile, El Salvador, Peru,
Argentina and Brazil, which together serve about 3 million
customers. In addition, PP&L Global owns interests in electric
generation facilities in Spain, Portugal, Bolivia and Peru.
PP&L Resources, with headquarters in Allentown, Pa., also is
the parent company of PP&L, Inc. which provides electricity
delivery service to 1.2 million homes and businesses in
Pennsylvania, generates electricity; sells retail electricity and
natural gas in Pennsylvania through its PP&L EnergyPlus Co.; and
markets or trades wholesale energy to 26 states and Canada
through its Energy Marketing Center.
Other PP&L Resources subsidiaries include Penn Fuel Gas,
Inc., which distributes and stores natural gas and also sells
propane in Pennsylvania and Maryland; PP&L Spectrum, Inc., which
markets energy-management services and products; and H. T. Lyons,
Inc. and McClure Co., two energy management and heating,
ventilating and air-conditioning firms, which provide both
construction and maintenance services.
For recent news releases and other information about PP&L
Resources, see its Internet home page at www.pplresources.com;
for Bangor Hydro-Electric Company, www.bhe.com.
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