Message-ID: <24608410.1075857723197.JavaMail.evans@thyme> Date: Tue, 15 Feb 2000 03:16:00 -0800 (PST) From: rob.milnthorp@enron.com To: kyle.kitagawa@enron.com, john.lavorato@enron.com Subject: DJ Ontario Power CEO: Up To 7,000 MW 'In Play' By End 1Q Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Rob Milnthorp X-To: Kyle Kitagawa, John J Lavorato X-cc: X-bcc: X-Folder: \John_Lavorato_Dec2000\Notes Folders\Discussion threads X-Origin: Lavorato-J X-FileName: jlavora.nsf FYI... ---------------------- Forwarded by Rob Milnthorp/CAL/ECT on 02/15/2000 11:21 AM --------------------------- Paul Devries 02/15/2000 06:48 AM To: Jan Wilson/TOR/ECT@ECT, Rob Milnthorp/CAL/ECT@ECT, Eric LeDain/CAL/ECT@ECT cc: Subject: DJ Ontario Power CEO: Up To 7,000 MW 'In Play' By End 1Q More OPGI info... cheers, Paul ---------------------- Forwarded by Paul Devries/TOR/ECT on 02/15/2000 07:18 AM --------------------------- "Pergher, Gunther" on 02/14/2000 03:13:49 PM To: robmcl@access-capital.com, terry@access-capital.com, gelliott@aepr-canada.com, tdrolet@aepr-canada.com, acrowley@utilicorp.com, pbartsch@utilicorp.com, paul.blaha@atcopower.com, andrew.johnson@canagen.on.ca, david.gilchrist@canagen.on.ca, richard.harrobing@canagen.on.ca, VallasA@CNPower.com, ajperrin@duke-energy.com, jdpollock@duke-energy.com, martinm@encoreenergy.com, conway@enerconnect.com, Paul Devries/TOR/ECT@ECT, don.lee@iemo.com, b.williams@mercuryelectric.com, v.mantey@mercuryelectric.com, andrewst@est.gov.on.ca, jimc@northlandpower.ca, paulv@northlandpower.ca, norm.fraser@ohsc.com, aboschetti@torontohydro.com, rokashimo@torontohydro.com, bruce_mackay@transalta.com, david_backe@transalta.com, rocco_vita@transalta.com, joe_kirkpatrick@transalta.com, rob_campbell@transalta.com, dcaro@uniongas.com, keith_rawson@transcanada.com, dfrancis@uniongas.com, fhassan@uniongas.com cc: "Olver, Lynne" Subject: DJ Ontario Power CEO: Up To 7,000 MW 'In Play' By End 1Q DJ Ontario Power CEO: Up To 7,000 MW 'In Play' By End 1Q TORONTO (Dow Jones)--About 7,000 megawatts of Ontario Power Generation's operating generating capacity will be "in play" by the end of the first quarter, company President and Chief Executive Ron Osborne said Monday. As reported, the oil-and-natural gas burning Lennox plant near Kingston, and the coal-fired Lakeview generating plant in Mississauga have joined the Bruce nuclear plant on Ontario Power's divestiture list. Osborne said Ontario Power would like to auction the 2,140-megawatt Lennox and 1,140-MW Lakeview plants before November, when Ontario's competitive electricity market is due to start. He refused to speculate on the plants' market values. "When added to the 2,700 megawatts of planned independent generation in Ontario, and to the 1,700 megawatts that independent generators supply today, and the roughly 4,000 megawatts that can be brought into the province through interconnections, by this time next year we could see up to 15,000 megawatts provided by other companies," Osborne said in a luncheon speech. The company chose to put Lennox and Lakeview on the block because they are peaking plants and thus frequently set prices in Ontario's near monopoly wholesale market, Osborne explained after his speech. Ontario Power has agreed to give up wholesale market share to enable more competitors to participate in the upcoming spot market. The company must first "decontrol" or give up control over 4,000 MW of price-setting plants, typically coal-fired or hydro powered. Lennox, whose four 535-MW oil-fired units have recently been reconfigured to burn natural gas as well, is known as Ontario's "last-on, first-off" plant because it is run when electricity demand is greatest. As for Lakeview, four of its eight coal-fired units aren't operational. The plant, located west of Toronto in Mississauga, was supposed to be the site of a new natural-gas fired generating station called Lakeview New Generation. The project, announced in December 1998, was to be developed by Ontario Power, Calgary-based Atco Power and two Ontario municipal utilities. One of the four partners, municipal distributor Hydro Mississauga, recently withdrew from the project. A spokesman for Ontario Power said any sale of the site would likely involve negotiations for the new gas project. "But as far as the partners are concerned, it's still a viable proposition they're looking into," said the spokesman. If Ontario Power's Bruce A nuclear station can be brought back into service either by the company or by a new investor, "this would also contribute another 3,000 megawatts of clean electricity" to the provincial supply picture, said Osborne. The company has met with "several potential partners" in its Bruce nuclear plant and expects to report to its shareholder, the provincial government, in the next few weeks, he said. Jake Brooks, spokesman for Independent Power Producers Society of Ontario, said the two divestitures announced Monday are important. "These are large enough power plants that it's a good step towards breaking up the concentration of ownership in the power sector," he said. Ontario Power's small hydro-electric plants are also rumored to be for sale, he said. It makes sense that the company would try to sell those, too, because they're best run by small operators, said Brooks. IPPSO's concern is that the divestitures be conducted in as open a manner as possible, said Brooks. "And as we've said before, any proceeds over book value should be dedicated to paying down the stranded debt of the former Ontario Hydro," he added. Ontario Power is the largest of five successor companies to Ontario Hydro, which left behind a legacy of C$38.1 billion in outstanding debt and other liabilities when it was split up in April 1999. The successor companies are responsible for paying of a portion of that debt, but the provincial finance ministry estimates C$7.8 billion of the total is "residual stranded debt" that will likely be borne by electricity customers. -By Lynne Olver, Dow Jones Newswires; 416-306-2020; lynne.olver@dowjones.com Copyright (c) 2000, Dow Jones & Company Inc G_nther A. Pergher Senior Analyst Dow Jones Newswires Dow Jones & Co. Tel. 609.520.7067 Fax. 609.452.3531 The information transmitted is intended only for the person or entity to which it is addressed and may contain confidential and/or privileged material. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you received this in error, please contact the sender and delete the material from any computer. <> - Pergher, Gunther.vcf