FOR IMMEDIATE RELEASE
FirstEnergy Corp. October 15, 1998
76 South Main Street
Akron, Ohio 44308
News Media Contact: Analyst Contact:
Ralph J. DiNicola Ronald E. Seeholzer
(330) 384-5939 (330) 384-5500
FIRSTENERGY REACHES ASSET TRANSFER AGREEMENT WITH DUQUESNE LIGHT
FirstEnergy Corp. announced today that it has signed an agreement
in principle with Duquesne Light Company that would result in the
transfer of 1,436 megawatts (MW) owned by Duquesne Light at eight
generating units in exchange for 1,298 megawatts at three power
plants owned by FirstEnergy electric utility operating companies.
A definitive agreement on the exchange of assets, which will be
structured as a tax-free transaction, is expected to be reached
by the end of the year.
"This transaction will provide us with exclusive ownership and
operating control of all of the generating assets that are now
jointly owned and operated under the Central Area Power
Coordination Group (CAPCO) agreement," said FirstEnergy Chairman
and Chief Executive Officer Willard R. Holland. "As a result, we
will be better positioned to maximize the value of these eight
CAPCO generating units, which have a total capacity of 6,381 MW,"
he added.
CAPCO was formed in 1967 to jointly develop power generation and
transmission facilities in an effort to enhance power
coordination and reliability in the region. Under the CAPCO
agreement, Ohio Edison Company, The Cleveland Electric
Illuminating Company, Toledo Edison Company, Pennsylvania Power
Company - now FirstEnergy electric utility operating companies -
and Duquesne Light, headquartered in Pittsburgh, jointly own and
operate nine generating units at six power plants. FirstEnergy
companies already own and operate the 906-MW Davis-Besse Plant in
Oak Harbor, Ohio, which was also built under the CAPCO agreement.
Under the agreement in principle, FirstEnergy's electric utility
operating companies will acquire Duquesne Light's minority share
in eight generating units at five CAPCO power plants. These
include Duquesne's 187 MW of the 600-MW Unit 7 at the W. H.
Sammis Plant in Stratton, Ohio; 186 MW of the 597-MW Unit 5 of
the Eastlake Plant in Eastlake, Ohio; 401 MW of the 2,360 MW at
Units 1, 2 & 3 of the Bruce Mansfield Plant in Shippingport,
Pennsylvania; 498 MW of the 1,630 MW at Units 1 & 2 of the Beaver
Valley Power Station in Shippingport, Pennsylvania; and 164 MW of
the 1,194 MW at the Perry Nuclear Power Plant in Perry, Ohio.
Duquesne Light will fund decommissioning costs equal to its
percentage interest in the nuclear units.
In exchange, FirstEnergy would transfer ownership of three of its
electric utility operating companies' coal-fired plants with a
total capacity of 1,298 MW to Duquesne Light. The affected
FirstEnergy plants, with a total staff of 268 employees, are the
743-MW Avon Lake Plant in Avon Lake, Ohio; the 339-MW New Castle
Plant in New Castle, Pennsylvania; and the 216-MW Niles Plant in
Niles, Ohio. The agreement with Duquesne includes assurances that
FirstEnergy employees will be treated fairly.
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The Avon Lake, New Castle and Niles plants will be included in
Duquesne Light's recently announced plans for auctioning its
generating assets. The auction is expected to take place within
the next six months, and successful bids should be announced
within three months after the auction. As a result of the
auction and the time needed to obtain necessary regulatory
approvals, including those from the Nuclear Regulatory Commission
and the Pennsylvania Public Utility Commission, the asset
transfer is expected to take 12 to 18 months to close.
FirstEnergy, headquartered in Akron, Ohio, is a diversified
energy services company with more than $18 billion in assets and
more than $5 billion in annual revenues. FirstEnergy's electric
utility operating companies comprise the nation's 12th largest
investor-owned electric system.
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