BANGOR, Maine---The Maine Public Utilities Commission, in an order issued last week, approved the proposed sale of most of the generating assets and certain transmission rights of Bangor Hydro-Electric Company (NYSE: BGR) to PP&L Global, Inc., a subsidiary of PP&L Resources, Inc. (NYSE: PPL). PP&L Global has formed a subsidiary, Penobscot Hydro, LLC, that will actually own the assets
The Maine commission's approval of the sale represents a major milestone in the acquisition transaction, according to Robert S. Briggs, president and CEO of Bangor Hydro-Electric Company, and Robert D. Fagan, president of PP&L Global.
The commission's action followed acceptance of a written recommendation that was submitted with the consent of all the participants in the approval case, including the Public Advocate.
Bangor Hydro signed an agreement to sell most of its generating assets in September 1998 and filed its application for approval of the sale in October 1998. "The commission's timely and affirmative response to our application keeps our transaction right on schedule," said Briggs. "The commission's review of this matter has been very thorough and very prompt, given the volume of the material to be reviewed." Briggs also praised the work of the Office of the Public Advocate and the commission staff in reviewing and processing the utility's application on an expeditious basis
Under the agreement approved by the commission, Bangor Hydro will be selling its hydroelectric stations, its 52-megawatt interest in the William F. Wyman Unit 4 generating station in Yarmouth, and certain transmission rights which enable it to import power from Canada. In addition, under a separate agreement also approved by the commission, Penobscot Hydro will be selling the output of the hydroelectric stations to Bangor Hydro until March 2000, at which time Maine's new electric restructuring law signed last year by Governor Angus King will go into effect. The restructuring law also triggered the sale, since it requires all Maine utilities to divest their generating assets prior to the beginning of retail access
The generation asset sale remains subject to various approvals by the Federal Energy Regulatory Commission, as well as certain third-party consents
The Maine commission's action sets the stage for securing the remaining approvals necessary to complete the transaction. "We are looking forward to operating these and other facilities which we hope to develop in the future in the competitive marketplace that is emerging in the New England region," said Fagan.
Bangor Hydro is an electric utility serving a population of about 192,000 in an area encompassing about 5,200 square miles in eastern and east coastal Maine. Bangor Hydro is a member of the New England Power Pool and is interconnected with other New England utilities to the south and with the New Brunswick Power Corp. to the north.
PP&L Global has investments and commitments totaling more than $2.3 billion. In addition to the acquisition of the Maine power plants and 13 Montana power plants, PP&L Global also is developing power plants near Kingman, Ariz.; in Wallingford, Conn.; and in eastern Pennsylvania, with a combined generating capacity of more than 1,500 megawatts.
The company, which was formed by PP&L Resources in 1995, also has ownership and operational interests in distribution companies in the United Kingdom, Chile and El Salvador that deliver electricity to more than 2 million customers. Additionally, PP&L Global has investments in Argentina, Peru, Spain, Portugal, Bolivia and Brazil.
PP&L Global , located in Fairfax, Va., is PP&L Resources' second-largest subsidiary. The largest, PP&L, Inc. , delivers electricity to 1.2 million customers in Pennsylvania, generates electricity, and markets wholesale energy in the United States and in Canada; and through PP&L EnergyPlus Co. , sells competitively priced energy and energy services to newly deregulated markets. Other PP&L Resources companies are: PP&L Spectrum , which markets energy-management services and products; Penn Fuel Gas, which sells natural gas and propane in Pennsylvania and Maryland; and H. T. Lyons and McClure Company , which provide heating, ventilating and air-conditioning services in the mid-Atlantic region.