BANGOR, Maine -- The Federal Energy Regulatory Commission (FERC), in a vote taken Wednesday (3/10), 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 FERC's approval of the sale represents the second 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 Maine Public Utilities Commission issued its approval of the transaction in February 1999. The FERC's action followed staff analysis of voluminous application materials submitted by Bangor Hydro.
Bangor Hydro signed an agreement to sell most of its generating assets in September 1998 and filed its application for approval of the sale with the FERC in January 1999. "This is the most important federal approval. We are delighted that it was issued in a timely manner and are pleased with its contents," said Briggs. "We expect the remaining approvals needed to close will be issued soon, which keeps our transaction right on schedule."
Under the agreement approved by the FERC, 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 March 2000, Maine's new electric restructuring law signed last year by Gov. 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 other approvals by the FERC, as well as certain third-party consents.
The FERC's action sets the stage for securing the few remaining approvals necessary to complete the transaction. "PP&L Global is looking forward to operating these well-maintained and low-cost facilities that meet the Maine legislature's criteria for environmentally friendly power. We expect to be able to supply a growing demand for this power at a very competitive price," said Fagan.
Bangor Hydro is an electric utility serving a population of about 192,000 in an area encompassing 5,275 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 the anticipated acquisition of 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.