The US Federal Energy Regulatory Commission (FERC) has approved the proposed sale of New England Electric System’s (NEES’s) fossil and hydro generating business.
The buyer will be US Gen New England, an affiliate of Pacific Gas &Electric. The sale, which may be completed by mid 1998, covers some 4000MW of capacity and includes power purchase contracts for around 1100MW.
Including some 15 hydro plants, this package will cost USGenNE US$1.59B.
The sale is intended to reduce NEES’s stranded investment by half, and allow it to reduce customer tariffs by 18%.
The utility had previously guaranteed that tariffs would decrease by at least 10%, following the 1997 Massachusetts Restructuring Act, which went into effect on 1 March last year.