Carolina Power & Light (CP&L) of Raleigh, N.C., announced two major business moves recently that serve to create a regional platform for the company`s expansion.
First, the company agreed to acquire North Carolina Natural Gas Corp. (NCNG) through a $345 million, stock-for-stock transaction. CP&L expects to add NCNG`s natural gas and propane products into its portfolio. “We plan to create a larger regional platform from which to expand our energy-related products and services throughout the Carolinas and beyond,” said William Cavanaugh III, CP&L president and CEO.
NCNG, headquartered in Fayetteville, provides gas, propane and related services to more than 173,000 customers in 86 cities and four municipal gas distribution systems in south-central and eastern North Carolina. The company has about 515 employees, and generated $232 million in revenues in its 1998 fiscal year.
“NCNG`s gas expertise and growing customer base will benefit CP&L, and NCNG will benefit by being part of a larger organization in a consolidating industry,” said Calvin Wells, NCNG chairman and CEO.
Second, CP&L announced plans to build a gas-fired power plant totaling as much as 1,100 MW in Rowan County, north of Salisbury, N.C.-outside CP&L`s retail service area. Construction is targeted to begin by the end of 1999.
The Rowan County plant is intended to advance CP&L`s strategy for increasing sales in the competitive wholesale electricity market. “We have had a lot of success as a company in the wholesale energy market, and we see this as a major part of our business strategy,” Cavanaugh said.
CP&L recently signed new agreements with three large wholesale customers, including a plan to provide peaking capacity to North Carolina Electric Membership Corp. customers beginning in 2001. CP&L has a 160 MW peaking unit under construction at its Asheville plant in Buncombe County, and initial site work has begun on three peakers at the company`s Lee plant in Wayne County.