AmerGen in talks to buy Nine Mile Point

31 March 1999

AmerGen Energy Co, the British Energy and PECO Energy joint venture, is in negotiations with Niagara Mohawk Corp to acquire the Nine Mile Point 1 and 2 nuclear plants on the shore of Lake Ontario in upstate New York. AmerGen is completing a due diligence process to buy Three Mile Island 1 (See NEI, Nov 98 p3).

Niagara Mohawk owns the 613 MWe BWR Nine Mile Point 1 and is the largest of five utility owners of the 1140 MWe BWR Unit 2. Unit 2’s other owners are New York State Electric & Gas Corp, Rochester Gas and Electric, Long Island Power Authority, and Central Hudson Gas & Electric.

In a statement issued on 28 January, Niagra Mohawk said it has decided to sell its nuclear assets along with its fossil and hydro plants, in order to concentrate on energy delivery. With New York State currently restructuring its electric industry, all of Nine Mile Point’s utility owners are planning to divest their generating plants and focus on distributing power to end-use customers.

If the deal is consummated, industry analysts expect the sale price to be in the region of $135 million. A barrier could be Niagara Mohawk’s insistence that a buyer be willing to take over the current contract between the utility and the International Brotherhood of Electrical Workers, the union that represents 1350 employees at the two nuclear plants.

Like TMI 1, both Nine Mile Point units have performed well in recent years. Unit 1 is licensed until 2009, unit 2 has a licence until 2029. NMP 1 operated above 90% capacity last year. However, the unit has been the subject of some controversy, owing to vertical cracks in its core shroud found in March 1997. A structural analysis of the core shroud last year by MPM Technologies, an independent contractor, concluded that the plant is safe.

The sale would also have to be approved by state and federal regulators, a process that could take 12 to 18 months.



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