Pennsylvania-based PP&L, Inc. and Energy New England, LLC have reached an agreement in principle on the business terms for a wholesale energy marketing, trading and risk-management services agreement. This agreement brings together the expertise of one of the nation's largest energy trading operations with the largest wholesale aggregator of public power system load and generation assets in the New England region.
Energy New England, an energy cooperative organization formed to provide energy and energy-related services to public power entities in the developing competitive electricity markets in New England, represents about 700 megawatts of peak load and 850 megawatts of energy supply. Under the agreement that is being finalized, PP&L, Inc.'s Energy Marketing Center will provide wholesale electric power marketing, trading and risk-management services on a "round-the-clock" basis to ENE. Together, ENE and PP&L, Inc.'s Energy Marketing Center will work to optimize purchases and sales of energy and energy products to reduce overall ENE supply costs and enhance the value of ENE supply assets.
"This will be an excellent relationship, bringing important benefits to both parties," said Mike Steffes, PP&L, Inc.'s vice president-Energy Marketing Center. "We are very confident that, through our extensive experience and resources in the Northeast energy market, we can produce savings for the ENE and its municipal systems." Steffes said he expects the agreement to be finalized within the next week.
According to Rick Zimbone, chief executive officer, Energy New England, "PP&L's energy-trading expertise and resources will provide significant benefits to municipal systems participating in the Energy New England program. This agreement will enable ENE to obtain favorable energy prices for its customers in the new NEPOOL competitive wholesale market structure. With its power brokering and other energy and management services options, ENE is assisting municipal systems to stay competitive in the evolving energy marketplace." Collectively, the load and supply resources managed by Energy New England for its customers make it the ninth largest system in the New England Power Pool.
PP&L, Inc.'s Energy Marketing Center, which trades electricity and natural gas in 28 states and Canada, is one of the top 20 energy traders in the nation, Steffes said. PP&L, Inc. will manage the marketing of electricity from Energy New England's generating resources and also buy electricity for the ENE alliance from the New England Power Pool or neighboring pools, when that is appropriate.
"With the deregulation of portions of the electricity market, there have been fundamental changes in the way companies buy and sell this essential commodity," said Steffes. "PP&L, Inc. is a major participant in the mid-Atlantic energy market and is very familiar with the operations of other markets in the Northeast."
PP&L, Inc. is a subsidiary of PP&L Resources, Inc. (NYSE: PPL), a Fortune 500 company based in Allentown, Pa. 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. PP&L Global , another subsidiary of PP&L Resources which develops electric generation around the world, recently announced the acquisition of assets from Bangor Hydro in Maine and plans for development of a power plant in Wallingford, Conn.
Energy New England provides a growing array of services to municipal utilities throughout New England. In addition to energy trading and risk management, ENE offers Year 2000 compliance, energy management services and strategic consulting. See Energy New England's Internet home page at www.energynewengland.com for more information about Energy New England.