THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, April 18, 1996 TAG: 9604180347
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: Short : 50 lines
The topsy-turvy world of electric utilities took another sharp turn toward the unconventional Wednesday as Dominion Resources Inc. announced it will buy a major coal-fired generating plant in Illinois.
Dominion, the Richmond-based parent of Virginia Power, said it will pay $186.2 million for the Kincaid Generating Station southeast of Springfield.
The purchase of the 1,108-megawatt plant from Chicago-based Commonwealth Edison Co. will more than double the generating capacity of plants that Dominion owns outside its Virginia Power system.
The sale marks the largest transfer ever in the United States of a ``classic regulated utility plant to an independent power producer,'' said Mark Lazenby, a Dominion spokesman.
The deal may foreshadow a massive restructuring of utility companies.
Industry analysts have said that under the pressure of mounting competition,utilities might eventually break up into several specialized companies: one concentrating on generation of electricity, another on transmitting it across long distances and still another on distribution to the actual end users.
Dominion officials said the plant, which is part of ComEd's highly regulated base generating network, will sell its power output to ComEd for 15 years. But they said the station will eventually be operated as a full-fledged independent power producer, marketing its electricity on the open market to any and all would-be buyers.
ComEd has been a rumored seller of the Kincaid plant for a few months.
Besides the sale of that station, it also announced the sale of another coal-fired plant in Hammond, Ind., to an independent-power unit of Atlanta-based Southern Co., for $64.2 million.
ComEd said the sale of the plants, which will require ``major upgrades,'' will help it accomplish its goal of being a lower-cost power generator.
Lazenby said Dominion Energy, the subsidiary buying the plant, owns about 570 megawatts of generating capacity in the United States and another 310 megawatts in Argentina, Bolivia and the Central American nation of Belize.
He said more than 150 people work at the Kincaid plant, which started operating in 1968. Dominion will initiate talks for a contract with the union representing workers there, he added. by CNB