(Duke Energy logo) Duke Energy Corporation
422 South Church Street
P.O. Box 1244
Charlotte, NC 28201-1244
Nov. 18, 1997 CONTACT: Randy Wheeless
Office : 704/382-8379
24-Hour: 704/594-0681
: Cory Warren, PG&E
Office : 415/973-5915
PG&E APPROVES SALE OF THREE POWER PLANTS TO DUKE ENERGY SUBSIDIARY
SAN FRANCISCO -- Directors of Pacific Gas and Electric Company and its parent
company PG&E Corporation (NYSE: PCG) today approved the sale of three electric
generating plants in California for $501 million to Duke Energy Power Services
Inc., the successful bidder in PG&E's first power plant auction.
Duke Energy Power Services Inc. submitted the winning bid for the following
three power plants, which have a combined capacity of 2,645 megawatts:
Morro Bay Power Plant in San Luis Obispo County; Moss Landing Power Plant in
Monterey County; and Oakland Power Plant in Alameda County.
PG&E employees will continue to operate and maintain the three power plants
under a two-year Operations and Maintenance agreement with the new owner.
"Today's sale marks the achievement of a key milestone in the opening of
California's electric utility industry to full competition," said Gordon R.
Smith, president and chief executive officer of PG&E. "The sale of these plants
helps to ensure increased competition among the producers of electricity in
California. Our customers want a competitive energy market to
choose from, and that is exactly what they are seeing now."
"Duke Energy examined the California generation market for competitively priced
acquisitions and these plants met that objective," said Richard Priory, chairman
and chief executive officer of Duke Energy. "These facilities will give Duke
Energy the opportunity to blend our expertise in trading and marketing
electricity and gas with our focus on operational excellence to deliver greater
value to our California customers."
"We are very pleased that Duke Energy Power Services will be acquiring these
power plants," said Smith. "They have an outstanding record of experience that
will help ensure the continued safe, reliable operations of these important
plants. We also are pleased that PG&E's skilled plant employees will continue to
operate and maintain these facilities for the next two years, providing a smooth
transition to the new ownership."
Under California's electric restructuring law, buyers of utility-owned power
plants must contract with the utility to operate and maintain the facilities for
two years following the sale. Approximately 170 people are currently employed at
the three plants.
The final approval of the sale by the California Public Utilities Commission is
expected by the end of this year, and the sale is expected to close by March 31,
1998.
The sale of the plants moves forward the first round of electric generating
divestiture following PG&E's previous announcements that it would sell eight
power plants, all located in PG&E's northern and central California service
territory.
PG&E's auction process began on Sept. 8, 1997, when potential bidders were
invited to submit non-binding bids for one or more
plants by Oct. 10, 1997, to PG&E's financial advisor, Morgan Stanley & Co.
Incorporated.
A qualified group of bidders was then invited to submit binding offers by Nov.
14, 1997, for final evaluation by PG&E.
The Moss Landing Power Plant, situated next to the Pacific Ocean 40 miles south
of San Jose, Calif., is PG&E's second largest fossil generating facility. It has
a generating capacity of 1,478 megawatts.
The Morro Bay Power Plant is located next to the Pacific Ocean in the city of
Morro Bay. It has a generating capacity of 1,002 megawatts.
The Oakland Power Plant is in the city of Oakland adjacent to San Francisco Bay.
It has a generating capacity of 165 megawatts.
A second auction of the remaining fossil-fueled and geothermal power plants will
be held in 1998. It will include Contra Costa and Pittsburg power plants in
Contra Costa County, Hunters Point and Potrero power plants in San Francisco,
and The Geysers, a geothermal power plant, in Lake and Sonoma counties. These
assets have a combined generating capacity of 4,718 megawatts.
PG&E will continue to own and operate its Diablo Canyon Nuclear Power Plant near
San Luis Obispo, as well as a fossil-fueled generating plant in Humboldt County
and three mobile turbines.
Pacific Gas and Electric Company is the San Francisco-based regulated utility
subsidiary of PG&E Corporation. It is one of the nation's largest investor-owned
energy utilities, serving nearly 13 million people in Northern and Central
California. The utility's 70,000-square-mile service area stretches from Eureka
in the north to Bakersfield in the south and from the Pacific Ocean in the west
to the Sierra Nevada in the east.
Duke Energy owns and operates more than 18,000 megawatts of generating capacity
around the world. Much of that capacity is concentrated in North Carolina and
South Carolina where Duke serves the electrical needs of about two million
customers.
Duke Energy Power Services develops, owns and operates electric generation in
the United States. It is a subsidiary of Duke Energy Corporation (NYSE: DUK), a
global energy company headquartered in Charlotte, N.C., with more than $20
billion in assets.
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Duke Energy will hold a teleconference today at 6 p.m. eastern with CEO Richard
Priory. To participate, reporters should call (888) 566-6146. The password for
the conference is "California." Reporters should call in a few minutes
beforehand to avoid a delay in getting connected. The call can be heard on a
delayed basis. Call Randy Wheeless at (704) 382-8379 for the number.