EXHIBIT 99
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NIAGARA MOHAWK, ROCHESTER GAS AND ELECTRIC REACH AGREEMENT
WITH NRG FOR SALE OF OSWEGO STEAM STATION
SYRACUSE, April 1 -- Niagara Mohawk Power Corp. today announced an agreement to
sell the Oswego Steam Station electric generating plant to NRG Energy, Inc.
Niagara Mohawk will receive $80 million for its 88 percent share of the
1,700-megawatt station. An agreement by co-owner Rochester Gas and Electric to
sell its share of the plant is subject to approval by the company's board of
directors.
The successful sale of the Oswego plant will bring the total proceeds of Niagara
Mohawk's fossil and hydroelectric divestiture to $860 million.
"We are extremely pleased with the results of our divestiture process," said
William E. Davis, Niagara Mohawk's chief executive officer. "We are now in a
good position to implement our shareholder value strategy of retiring capital.
Niagara Mohawk plans to use the $860 million from the asset sales and our
continued strong cash flow from operations to retire more than $1 billion in
debt this year."
The agreement to sell the Oswego station is the latest successful step in
Niagara Mohawk's POWERCHOICE restructuring plan. In December, the company
announced agreements to sell its Huntley and Dunkirk coal plants to NRG for
$355 million and its 72 hydroelectric generating plants to an affiliate of
Orion Power Holdings Inc. for $425 million. Niagara Mohawk continues to pursue
the sale of the remaining major components of the company's fossil and
hydroelectric generating portfolio -- the Albany Steam Station, a 400-megawatt
oil/gas facility; and a 300-megawatt stake in the Roseton Station, an oil/gas
facility located in Newburgh. As previously announced, the company also
continues to pursue the sale of its nuclear assets.
"Niagara Mohawk is taking a deliberate and thorough approach to the auction of
its generating assets and is achieving strong results," Davis said. "We will
use the same approach for the sale of the Albany Steam Station and our share of
the Roseton Station, which we hope to announce later this year."
The Oswego Station, located on south shore of Lake Ontario in the city of
Oswego, consists of two 850-megawatt operating units. RG&E is a 24 percent
owner of one unit. The Oswego station primarily serves as reserve capacity for
use during high-demand or low-supply periods. It operated at approximately 5
percent capacity in 1998.
"This announcement is good news for Niagara Mohawk, our customers, the plant's
talented and dedicated employees and the Oswego community. The sale to NRG
offers the best opportunity for the Oswego Steam Station to continue as a power
producer, employer and taxpayer," Davis said. "The leadership of the county of
Oswego, the Oswego School District and the city of Oswego deserve credit for
the foresight that led to the creation of a Payment in Lieu of Taxes agreement
that made this sale possible."
NRG Energy, a wholly owned subsidiary of Northern States Power Company (NYSE:
NSP), is a leading independent power producer specializing in the development,
construction, operation, maintenance and ownership of power plants. NRG is
headquartered in Minneapolis and is one of the fastest growing generation
companies in the world.
Under a transition power contract in place through June 2003, Niagara Mohawk
will purchase electricity from NRG at negotiated prices. The sale is subject
to approval by the New York Public Service Commission and various federal
agencies. Niagara Mohawk expects to complete the transaction later this year.
Investment bankers Merrill Lynch & Co. and Donaldson, Lufkin & Jenrette
Securities are serving as Niagara Mohawk's financial advisors for the
generation asset sale.
Niagara Mohawk, a subsidiary of Niagara Mohawk Holdings Inc. (NYSE:NMK), is a
regulated energy delivery company with the largest service territory in New York
State. The company serves more than 1.5 million electricity customers and more
than 540,000 natural gas customers across 24,000 square miles.