EXHIBIT 99.1
September 30, 1999
For information, contact:
Conectiv: Mary Rucci, (302) 429-3334
PSEG Power: Kathy Ellis (973) 430-6618
PECO: Bill Jones (215) 841-4129
CONECTIV TO SELL INTERESTS IN NUCLEAR PLANTS TO PSEG POWER AND PECO ENERGY
Wilmington, De. - Conectiv (NYSE:CIV), an energy and vital services provider
serving the Mid-Atlantic region, today announced it has reached agreements to
sell ownership interests in three nuclear plants to PSEG Power LLC (PSEG Power)
and PECO Energy Company (PECO). The ownership interests will be sold for
approximately $20 million, plus reimbursement of actual fuel inventory at
closing, subject to receipt of various federal and state regulatory approvals.
All of Conectiv's nuclear interests will be sold as a result of the agreements:
o A 15-percent interest (328 megawatts) in the Peach Bottom Atomic Power
Station Units 2 and 3 will be sold in equal shares to co-owners PSEG and
PECO, each of which presently owns about 43%. PECO is the operator of that
facility.
o A 14.8-percent interest (328 megawatts) in the Salem Nuclear Generation
Station Units 1 and 2 will be sold to PSEG Power, a subsidiary of Public
Service Enterprise Group Incorporated (PSEG), which presently owns about
43% interest in and is operator of that facility.
o A five-percent interest (52 megawatts) in the Hope Creek Nuclear Generating
Station also will be sold to PSEG Power. PSEG presently owns the other 95
percent of Hope Creek and operates the facility.
According to the agreements, PSEG Power and PECO will assume full responsibility
for the ultimate decommissioning of Peach Bottom, Salem and Hope Creek. The
sales are expected to close by mid-2000.
"This sale moves Conectiv closer to its goal of focusing on a mid-merit
generation strategy," said Tom Shaw, Executive Vice President of Energy Supply,
who noted that the electricity produced from the three stations will continue to
be available for customers in the region that the companies serve. Shaw
continued, "A long-term benefit of these sales to Conectiv is reducing the
financial risk associated with a minority ownership in nuclear plants. As the
industry restructures, larger utilities strategically focused on nuclear
generation will be better positioned to assume these risks."
Shaw noted that in keeping with its mid-merit generation strategy, Conectiv
plans to announce the buyers of its baseload fossil fuel plants later this year.
Conectiv is developing a generation portfolio of mid-merit plants that are able
to follow the market peaks, he noted, and recently announced its plans to build
a new 500-megawatt combustion turbine/combined cycle plant at its Hay Road/Edge
Moor complex in New Castle County, Delaware.
"This is one in a series of growth steps on the road to further positioning PSEG
Power as a player in the regional energy market," said Frank Cassidy, president
PSEG Power "The opportunities are out there and, as we did in this case, we
intend to evaluate and acquire additional generation that enhances our portfolio
and adds value to our bottom line."
Jerry Rainey, president of PECO Nuclear, said the purchase of 7.5 percent
ownership of Peach Bottom, bringing PECO Energy's ownership share to 50 percent,
fits well with the company's strategic business objective to increase its
nuclear generation portfolio. "Peach Bottom is an excellent, high capacity
plant," Rainey said. "We welcome ownership of the additional energy from the
facility."
Conectiv (NYSE:CIV) was formed in March 1998 through a merger involving Atlantic
Energy and Delmarva Power & Light Company. The company, headquartered in
Wilmington, DE, provides regulated electric and gas utility services and is also
engaged in telecommunications and other non-regulated activities. Conectiv
serves more than one million customers in New Jersey, Delaware, Maryland,
Virginia, and Pennsylvania.
PSEG Power LLC (PSEG Power) is a wholesale electric generation and trading
company operating in the northeastern United States. PSEG Power is an
unregulated subsidiary of PSEG (NYSE:PEG), a diversified energy company. At the
completion of this transaction, PSEG Power will own 10,816 megawatts of capacity
in the northeast. Other subsidiaries of PSEG include: PSE&G, a regulated gas and
electric delivery utility; PSEG Energy Technologies, an unregulated marketer of
energy and energy services; PSEG Resources, which makes passive, energy related
investments; and PSEG Global, which owns, develops and operates power plants and
electric distribution systems throughout the world.
PECO Energy (NYSE: PE) is an electric and gas utility serving 1.5 million
electric customers in the five-county Philadelphia area and 400,000 natural gas
customers in four suburban counties. It is one of the nation's largest nuclear
utilities, producing more than 33 billion kilowatt-hours of electricity in 1998
at its Limerick and Peach Bottom generating stations. PECO Energy has set new
nuclear performance standards in safety, availability and capacity factors,
efficient refueling outages, and low operating and maintenance costs.
PECO Energy also owns and operates coal, natural gas, oil, landfill gas and
hydro power plants. PECO Energy's Team operates a 24-hour energy trading floor
with transactions in 47 states and Canada.
Navigant Consulting, Inc. and Credit Suisse First Boston advised Conectiv on
the sale.
Navigant Consulting, Inc./Reed Consulting Group (NYSE: NCI) is a global
management consulting firm that provides strategic, financial, management, and
expert services to energy-based, network, and other regulated industries.
In 1997, Reed Consulting Group merged with the Metzler Group, Inc., a
publicly-traded holding company for firms providing consulting services to
energy-related businesses. In 1999, the Metzler Group and its subsidiaries,
including Reed Consulting Group, became Navigant Consulting, Inc.
Credit Suisse First Boston, a leading global investment banking firm that
provides comprehensive financial advisory, capital raising, and financial
products for users and suppliers of capital around the world, is also advising
Conectiv in the sales process. The firm is wholly-owned by the Zurich,
Switzerland-based Credit Suisse Group.
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This news release includes forward-looking statements. Although PSEG and its
subsidiaries believe that their expectations are based on reasonable
assumptions, they can give no assurance that these expectations will be
achieved. For further information, please refer to their reports filed with the
Securities and Exchange Commission. These documents address company business,
industry issues and other factors that could cause actual results to differ
materially from those indicated in this release.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995: Statements in this press release regarding PSEG's business which are not
historical facts are "forward-looking statements" that involve risks and
uncertainties. For a discussion of such risks and uncertainties which could
cause actual results to differ from those contained in the forward-looking
statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for
the most recently ended fiscal year.