The dismantling of big independent power producer and electricity wholesaler SITHE ENERGIES INC. is underway (see Japan-U.S. Business Report No. 362, November 1999, p. 7). The New York City company's majority owner, France's VIVENDI, and MARUBENI CORP., which has a 30 percent stake in the firm, have agreed to sell 21 power plants located in Pennsylvania, New Jersey and Maryland to Houston's RELIANT ENERGY for $2.1 billion in cash. With a net generating capacity of 4,276 megawatts, these facilities represent about a third of Sithe's operational capacity. The big trading company reportedly netted some $600 million on the sale. Vivendi and Marubeni continue to search for buyers for Sithe's other generating plants.
Building on a 1992 information-sharing arrangement, CHUBU ELECTRIC POWER CO., INC. and CONSUMERS ENERGY, a CMS ENERGY CORP. subsidiary, have agreed to form a purchasing alliance. Japan's third-largest electric utility and Jackson, Michigan-headquartered Consumers Energy, which ranks fourth in the United States among combined natural gas and electric utilities, see the tie-up as a way to gain leverage in purchasing materials for their operations. Before details of the alliance are finalized, representatives of the two companies will examine product cost, product standardization, new product development, electronic technology, resource and knowledge sharing, and procurement process improvement and streamlining.
An exchange rate of ¥109=$1.00 was used in this report.aaaaaa