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No. 363, December 1999

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Japanese Companies in the US


ENERGY RESOURCES

The progressive deregulation of Japan's power-generation market has a number of domestic firms scrambling to gain the expertise to take advantage of the business opportunities emerging. For MITSUBISHI CORP. and TOKYO ELECTRIC POWER CO., INC., one means to this end is to become shareholders in independent power producer ORION POWER HOLDINGS, INC. Through recently formed DIAMOND GENERATING CORP. of Los Angeles, the trader invested $120 million in the Baltimore- based company, which was established in March 1998 by CONSTELLATION ENERGY GROUP, the parent of BALTIMORE GAS AND ELECTRIC CO., and investment banker GOLDMAN, SACHS & CO. to acquire electric generating plants across the United States and Canada. TEPCO, Japan's top electricity supplier, put $80 million into Orion. By mid- 2000, Orion expects to have spent more than $2.7 billion to buy in excess of 5,200 megawatts of generating capacity in the Northeast and Upper Midwest. Pending is a $1.7 billion deal to purchase seven plants in Pennsylvania and Ohio from DUQUESNE LIGHT CO. that have a combined generating capacity of 2,600 MW. Orion sells the electricity it produces to local utilities.

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