NYSEG to keep 18% stake in Nine Mile Point 2

30 October 2000

Declining reserves of electric generating capacity in New York state have prompted a second utility to hold on to its share of ownership in the Nine Mile Point 2 nuclear plant on the southern shore of Lake Ontario.

In September, New York State Electric & Gas (NYSEG) said it no longer would try to sell its 18% share of the unit, saying there is at present too much market uncertainty.

Previously, the Long Island Power Authority, which also holds an 18% share of the plant, had been the only one of five New York utilities that share ownership in the plant did not intend to sell its stake.

The three other utilities still plan to sell their stakes in the plant in an auction expected to be completed by mid 2001. Niagara Mohawk owns 41% of Nine Mile Point 2, as well as 100% of Nine Mile Point 1, which is also up for sale. Niagara Mohawk must divest its ownership as a condition of its pending acquisition by the National Grid Group.

Rochester Gas & Electric owns 14% of Nine Mile Point 2. Central Hudson Gas & Electric owns 9%.

The Nine Mile Point units are expected to bring a far better price than they did in June 1999, when AmerGen, the joint venture of PECO Energy and British Energy, agreed to pay $163 million for Nine Mile Point 1 and 59% of Nine Mile Point 2. The deal fell through in May 2000 after the New York Public Service Commission determined that the price was not high enough to adequately compensate the utilities' customers. Since then, rising demand for electricity has caused the wholesale price of power in New York state to rise significantly.

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