Transaction Subject to Bankruptcy Court
and Regulatory Approvals
BETHESDA, Md. and CALGARY, Alberta, Dec. 9 /PRNewswire-FirstCall/ -- USGen
New England, Inc. and an affiliate of TransCanada Corporation
(NYSE: TRP; Toronto) today announced that TransCanada will purchase
hydroelectric generation assets with a total generating capacity of 567
megawatts (MW) for $505 million US in cash, subject to adjustment. No
qualified competing bids were received by the court-ordered deadline so the
auction originally scheduled for today did not take place.
The purchase is subject to the sale of the 49 MW Bellows Falls
hydroelectric facility to the Vermont Hydroelectric Power Authority, which
will result in a $72 million US reduction in purchase price.
The sale, previously announced in September 2004, is now pending a
bankruptcy court hearing scheduled for Dec. 15, 2004. Other regulatory
approvals and conditions also will need to be met prior to closing.
The assets include generating systems on two rivers in New England: the
484 MW Connecticut River system in New Hampshire and Vermont and the 83 MW
Deerfield River system in Massachusetts and Vermont. The systems include 13
dams with 41 hydroelectric generating units. On a ten-year average, the
generating systems produced approximately 1.4 million MW-hours of electricity
annually. The output is not subject to long-term contracts.
The Town of Rockingham has an option agreement with USGen New England to
purchase the Bellows Falls facility for $72 million US. On Dec. 7, 2004 the
Town exercised the option and assigned its rights to the Vermont Hydroelectric
Power Authority. Should the Bellows Falls transaction close, TransCanada's
acquisition will exclude that facility and the purchase price will be reduced
to $433 million US.
The transaction is expected to close in the first half of 2005.
TransCanada will finance the acquisition in a manner consistent with
maintaining its solid financial position and credit ratings. TransCanada
expects the transaction to be immediately accretive to earnings and cash flow.
Headquartered in Bethesda, Md., USGen New England, Inc., which is
currently in Chapter 11, is a subsidiary of National Energy & Gas
Transmission, Inc. (NEGT). TransCanada also recently closed on its purchase of
NEGT's Gas Transmission Northwest Corporation.
TransCanada is a leading North American energy company. TransCanada is
focused on natural gas transmission and power services with employees who are
expert in these businesses. TransCanada's network of approximately 41,000
kilometres (25,600 miles) of pipeline transports the majority of Western
Canada's natural gas production to the fastest growing markets in Canada and
the United States. TransCanada owns, controls or is constructing more than
4,700 megawatts of power generation -- an amount of power that can meet the
needs of about 4.7 million average households. The Company's common shares
trade under the symbol TRP on the Toronto and New York stock exchanges. Visit
TransCanada on the Internet at http://www.transcanada.com for more
information.
FORWARD LOOKING INFORMATION
Certain information in this news release is forward-looking and is subject
to important risks and uncertainties. The results or events predicted in this
information may differ from actual results or events. Factors which could
cause actual results or events to differ materially from current expectations
include, among other things, the ability of TransCanada to successfully
implement its strategic initiatives and whether such strategic initiatives
will yield the expected benefits, the availability and price of energy
commodities, regulatory decisions, competitive factors in the pipeline and
power industry sectors, and the current economic conditions in North America.
For additional information on these and other factors, see the reports filed
by TransCanada with Canadian securities regulators and with the United States
Securities and Exchange Commission. TransCanada disclaims any intention or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
SOURCE USGen New England, Inc.
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Related links:
http://www.negt.com
http://www.transcanada.com
CONTACT:
Media Inquiries: Kurt Kadatz or Hejdi Feick
of TransCanada, +1-403-920-7859; or Natalie Wymer of USGen New
England, +1-301-280-5654; or Investor & Analyst Inquiries: David
Moneta or Debbie Stein of TransCanada, +1-403-920-7911
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