FPL Group, Constellation Energy to Merge
FPL Group Inc. and Constellation Energy have signed a definitive agreement to create the nation’s largest competitive energy supplier and its second-largest electric utility portfolio.
The transaction will create a company with a market capitalization of approximately $28 billion (based on current market values), combined annual revenues of $27 billion, and $57 billion in total assets. The combined company will be named Constellation Energy.
Under the definitive merger agreement, which was unanimously approved by both companies’ boards of directors, each common share of Constellation Energy outstanding immediately prior to the merger will be converted into 1.444 common shares of Constellation Energy at the time of the merger, and each common share of FPL Group outstanding immediately prior to the merger will be converted into one share of Constellation Energy at the time of the merger. This represents a premium to Constellation Energy shareholders of approximately 15 percent based on the exchange ratio calculated using the average of the 20-day closing prices for both companies ending Dec. 13, 2005. Upon consummation of the merger, FPL Group shareholders will own approximately 60 percent and Constellation Energy’s shareholders will own approximately 40 percent of the combined company. Based on both companies’ previously communicated earnings expectations, the transaction is expected to be accretive to both companies in the first full year of combined operations, excluding transaction and integration costs and the positive effects of purchase accounting.
The combined company will maintain dual headquarters in Juno Beach, Fla., and Baltimore. It will have approximately 21,750 employees and will serve more than 5.5 million electric customers in Florida and Maryland and 625,000 gas customers in Maryland. Its competitive wholesale and retail businesses will serve thousands of commercial, industrial and utility customers, including 72 of the Fortune 100 companies.
Lewis Hay, III, currently chairman, president and chief executive officer of FPL Group, will become chief executive officer of Constellation Energy. Mayo A. Shattuck III, currently chairman, president and chief executive officer of Constellation Energy, will become chairman of the board of Constellation Energy upon completion of the merger and will also head the combined company’s competitive energy business. The Constellation Energy board will be composed of 15 members, nine of whom will be named by FPL Group, and six of whom will be named by Constellation Energy. Thirteen of the company’s board members will be non-executive directors.
It is anticipated that the new company’s dividend will be the same as that of FPL Group immediately prior to completion of the merger.
The merger is conditioned upon approval by the shareholders of both companies, expiration or early termination of the applicable Hart-Scott-Rodino waiting period and the approval of various state and federal regulatory authorities, including the Maryland Public Service Commission, the Federal Energy Regulatory Commission (FERC), and the Nuclear Regulatory Commission (NRC). The merger agreement contains other customary closing conditions. The companies are targeting the receipt of all necessary regulatory approvals in nine to 12 months, and they currently intend to seek shareholder approval in the second quarter of 2006.<<
InfraSource Transmission Line Completed
InfraSource Services Inc., a specialty contractor servicing utility transmission and distribution infrastructure in the United States, recently completed its construction on Bonneville Power Administration’s (BPA) Schultz-Wautoma 500-kV transmission line project in central Washington.
During the Dec. 7, 2005, dedication ceremony at the new Wautoma substation, BPA officials commended participants for bringing the project in on-schedule and under budget. Construction of the line began in March 2004, and it was energized on Dec. 5, 2005. As reported in WAPA’s Closed Circuit newsletter, InfraSource Transmission Services-Maslonka was awarded the $33.5 million contract to construct the 64-mile line by BPA on Jan. 30, 2004 based on its demonstrated transmission capabilities and competitive pricing.
The Schultz-Wautoma line was developed to improve reliability and add additional capacity to the electric grid in central Washington. Schultz-Wautoma is the third major transmission project BPA has completed in the past five years.
In the past two years, InfraSource has participated in dozens of transmission projects and built more than 400 line miles of transmission with some of the most challenging topographic and environmental conditions. InfraSource has experienced active demand for transmission services in all regions of the country and has built transmission lines in at least 10 states including: Arizona, California, Connecticut, Illinois, Michigan, Nevada, New Jersey, Texas, Washington and Wisconsin. The company was recently awarded two significant transmission line projects in Texas at a total estimated value of $35 million: a 68-mile 345-kV transmission line construction project in southeast Texas that is part of an overall effort to decrease the cost of power for customers in the region, and a 19-mile 345-kV transmission line construction project in south-central Texas to improve reliability in an area that has experienced rapid growth. These contracts are valued at a total of approximately $35 million.<<
AREVA T&D Product Receives Frost & Sullivan Award
AREVA T&D was awarded Frost & Sullivan’s 2005 Energy Training Product of the Year Award for its e-terrasimulator software.
AREVA T&D’s e-terrasimulator supports utilities, regional transmission organizations (RTOs), independent system operators (ISOs) and transmission companies in simulating real-life conditions of the grid with a level of realism. The award-winning software enables grid professionals to test and define more secure and efficient processes, practice on them, and build up associated knowledge and skills to be ready in the operational environment, under both normal and emergency conditions.
According to Frost & Sullivan, the winning factor in AREVA T&D’s e-terrasimulator is that it allows clients to insert models captured from their real-time production system into the simulator, thereby reducing a significant amount of current reading that simulation software commonly requires.<<
Utility Automation & Engineering T&D Seeking Articles in 2006
Utility Automation & Engineering T&D will be increasing in frequency to 10 times per year in 2006, and as a result, editors are currently seeking contributed articles from power industry experts on the following topics in the following issues.
April 2006 issue: geospatial technology; automatic meter reading; increasing transmission capacity; and mobile computing devices.
May 2006 issue: flexible ac transmission system (FACTS) technology; utility telecom; and equipment monitoring.
June 2006 issue: substation automation & integration; outage management; ROW maintenance; and transmission cable.
July/August 2006 issue: SCADA; mobile workforce management; infrared inspection; and protective equipment.
September 2006 issue: wide-area measurement systems (WAMS); distribution automation; vehicle fleet management; and equipment monitoring.
October 2006 issue: automatic meter reading technology and using meter data in power planning.
November 2006 issue: enterprise integration; substation automation; and substation construction.
December 2006: VAR management; geographic information systems; and transmission line building.
Those interested in contributing articles on any of the topics above, or other topics related to the transmission and distribution of electric power, should contact associate editor Kathleen Davis at firstname.lastname@example.org. Potential contributors are encouraged to query with a brief abstract detailing their article ideas. Article contributor guidelines are also available on request.<<
Gulf Coast Utility Communication Networks Perform through Hurricanes
During the major hurricane season of 2005, the private, internal networks-radio, microwave and fiber-of electric, gas and water utilities for the most part continued to function throughout and immediately after the storms. According to a research report by the United Telecom Council (UTC), these systems worked reliably, as designed, to support restoration and recovery after this season’s devastating natural disasters. In many communities during this hurricane season, internal communications networks were the only functioning communications in the first days the hurricanes hit, according to the report.
The UTC Research Report, titled “Hurricanes of 2005: Performance of Gulf Coast Critical Infrastructure Communications Networks,” was undertaken by UTC, the trade association representing the telecommunications and IT interests of critical infrastructure industry (CII) entities, to enlarge on anecdotal evidence offered by members in hurricane-devastated areas. Specific findings of UTC’s report include:
“-Eighty-six percent of impacted CII entities responding reported that their communications networks generally survived the hurricanes and continued to operate well throughout restoration efforts.
“-Private land mobile radio (LMR) networks provided critical communications among crews; however, the huge number of responding utility personnel from around the country taxed capacity or could not operate on local systems, pointing out the need for CII interoperability.
“-Utility fiber and microwave systems survived and generally continued to function; this was due in part to built-in redundancies, robustness and recovery mechanisms that would be cost-prohibitive for a for-profit network designed to serve the general public. Therefore, CII entities will continue to require private networks to meet mission-critical needs for the foreseeable future, along with the ability to expand them as needed to meet system growth requirements.
Unfortunately, there was little or no consistent coordination with state or local agencies or public safety organizations during or after the storms. Given the opportunities for improved response communications offered by robust CII systems, and the presence of CII personnel “on the ground” in nearly every disaster scenario, this lack emphasizes that CII must be included in emergency response planning at the Federal level.
To receive a copy of “Hurricanes of 2005: Performance of Gulf Coast Critical Infrastructure Communications Networks,” please contact UTC’s Research Department at email@example.com or 202-833-6805.<<
Utilities Kingston Selects Itron
Itron Inc. has a contract with Utilities Kingston in Kingston, Ontario, Canada, to provide the municipality with Itron’s advanced Fixed Network automatic meter reading (AMR) technology and CENTRON solid-state electricity meters.
Located on the northern shores of Lake Ontario, the Kingston municipality provides water, gas and electricity services to most of its 146,000 residents. Kingston joins four other Ontario utilities that have deployed pilots of Itron’s Fixed Network advanced metering technology-Wasaga Distribution, Hydro Ottawa Limited, Bluewater Power and Toronto Hydro-in anticipation of new “smart meter” initiatives from the Ontario Ministry of Energy to foster energy and water conservation.
The Ontario Ministry of Energy is proposing legislation that requires utilities to collect electricity usage data more frequently, and to offer programs that enable customers to respond to time-sensitive pricing, especially during periods of peak loads.
One of the key drivers for Kingston’s selection of Itron’s technology is the system’s open architecture that will allow Kingston to utilize its fiber optic network for backhaul communication from Itron’s network collector units, said Jim Keech, president and CEO for Utilities Kingston.
Brad Joyce, a Utilities Kingston Manager, said the utility is looking to expand its fixed network deployment to cover a total of 27,000 electric meters, as well as 34,000 water and 14,000 gas meters.<<
Wood Pole Suppliers Deliver in Storm Aftermath
In the four weeks that followed Hurricane Katrina’s destruction, an estimated 89,000 to 92,000 T&D poles were shipped in 2,300 trucks-some also carrying water and food for linemen and residents. In addition, approximately 90,000 wood cross-arms were delivered. The record of delivery was recorded in a storm response survey conducted by the Southern Pressure Treaters’ Association (SPTA).
The survey report says “wood pole manufacturers shipped an estimated 5,200 wood poles, or 130 truckloads, within the first 24 hours” of the storm’s passing. Another 5,500 wood poles (138 trucks) were delivered the next day, and 9,000 more poles (225 trucks) on the third day. This totals 19,200 wood poles delivered in a 72-hour period, despite serious problems with communications, road passage, fuel shortages and plant damage.
While rushing poles to Gulf Coast utilities, many treating plants had to deal with their own problems. A significant number of plants operated at reduced capacity due to storm-related damage and/or timber supply shortages.
The immediate needs of the region cut into pole inventories. Some forestland was damaged, and numerous logging crews stopped cutting poles and saw timber to work on FEMA-funded clearing operations. This combination, along with higher fuel prices, resulted in higher procurement and delivery costs for new orders. However, all pole treating plants are operating and most are working extra shifts to rebuild inventories. Delivery time for the most common distribution poles were somewhat longer than usual after the hurricane, but poles are available and standing timber is ample for meeting demands.
Martin Rollins, P.E., who conducted the survey for SPTA and resides in Gulfport, Miss., said “Without the industry’s efforts, people in the Gulf Coast would have had a much longer wait for electricity.”
In addition to supplying poles for the Gulf Coast, members and non-members have also donated $30,000 to the SPTA Hurricane Relief Fund for employees of the four pole treating plants in the affected area.
A copy of the hurricane special report can be found at www.spta.org.<<
Southwest Transmission Implements GPS Time Source
Southwest Transmission Electric Power Cooperative Inc., the Arizona-based electric power cooperative that operates and maintains a power delivery system that includes 580 miles of transmission lines and 20 substations, has implemented Symmetricom’s XL-750 GPS Time Source. The XL-750 synchronizes protection relays and other intelligent electronic devices (IEDs) that collect and time stamp fault data.
The XL-750 was developed by Symmetricom specifically for the power industry. Using GPS satellites, the XL-750 generates output pulses and time codes in multiple formats and offers timing accuracy (100 nanoseconds to UTC). The XL-750 synchronizes a wide variety of microprocessor-based power system equipment including: SCADA systems, remote terminal units (RTUs), protection relays, sequence of event recorders, digital fault recorders, power/tariff meters and other intelligent electronic devices (IEDs).
The XL-750 also meets the recommendations of the North American Electric Reliability Council for event timing, such as Recommendation No. 12 concerning GPS time-synchronized recording devices.
Tom Spence, technical services manager for Southwest Transmission, said, “With data constantly flowing in on disturbances ranging from open breakers to customers without power, having files with accurate time stamps has improved operational efficiency and customer service. Saving two hours on fault diagnosis time means two hours less time our customers have to go without power.”<<
ESCO Acquires Nexus Energy Software
ESCO Technologies Inc. has acquired Nexus Energy Software Inc. through an all-cash for shares merger transaction. The initial consideration paid was $28.5 million. The acquisition agreement also provides for contingent consideration during the four-year period following the merger if Nexus exceeds certain sales targets. The acquisition is not expected to have a material impact on earnings in fiscal 2006.
Nexus is headquartered in Wellesley, Mass. The company was founded in 1997 and has grown to an annual revenue level in excess of $10 million. Through its meter data management products, Nexus supports several critical operations including forecasting, distribution asset optimization, complex billing, revenue protection, customer service and demand response. More than 80 energy companies currently use Nexus software solutions.
Nexus will be led by the existing management team and will operate as a stand-alone subsidiary of ESCO reporting to the CEO. Nexus will continue to serve all its customers as it has in the past as well as collaborating with DCSI, ESCO’s utility communications business.<<
Sensus Installs Canadian Smart Metering Network
Sensus Metering Systems has installed the FlexNet with AMDS Connect Advanced Metering Infrastructure (AMI) system for Cambridge and North Dumfries Hydro Inc. (CNDHI) with the cooperation of their Canadian Distributor, KTI Limited. CNDHI will be piloting the FlexNet system as part of their involvement with the Ontario Utilities Smart Metering (OUSM) Working Group.
The FlexNet with AMDS Connect system enables CNDHI to collect hourly interval and time-of-use metering data on electricity consumption from residential and commercial customers across their service territory. CNDHI will also be testing the two-way features of the FlexNet system by installing remote disconnect, remote load shedding and advanced in-home display devices. The system consists of the Sensus solid-state iCon meter integrated with AMDS Connect (FlexNet) transceivers, the AMDS fixed network infrastructure and system software.
Because the FlexNet system is a tower-based AMR network with long range, reliance on additional infrastructure, such as numerous collection points is avoided. The system has a simple, single-tier design-from meter to tower, reducing infrastructure cost. Furthermore, AMDS provides a services agreement that handles installation, operation and maintenance of the network.
The CNDHI project is one of many FlexNet deployments completed in the past few months.<<
Miner & Miner Garners Two Contracts
Chatham-Kent, a single-tier local Canadian government in southwestern Ontario, has selected ArcGIS and ArcFM to replace the legacy AM/FM system they’ve operated at their utility divisions since 1998. The combined ESRI and Miner & Miner, a Telvent company, technology will provide spatial management of their electric, water, and wastewater networks.
The ArcFM/ArcGIS solution will extend existing functionality, allowing Chatham-Kent to further leverage GIS within its hydro, Public Utilities Commission (PUC) and engineering departments. By consolidating data management systems onto a single GIS platform, information sharing and access will improve across the organization.
ESRI Canada, M&M’s business partner in Canada, will implement the new system and First Base Solutions will provide data conversion services. The project began in October 2005 and is projected to roll out in October 2006. After the initial project is complete, Chatham-Kent plans to implement additional GIS-based applications.
In other news from Miner & Miner, CoServ Electric, a not-for-profit utility co-op serving Northern Texas for more than 65 years, has gone into production with Responder as its outage management system (OMS). The co-op serves 105,000 electric, retail, and business customers in a service area including parts of Collin, Cooke, Denton, Grayson, Tarrant, and Wise counties.
CoServ implemented ArcFM in 2003 for management of its electric distribution network. They’ve added Responder into its enterprise GIS solution, and it has also been integrated with CoServ’s CIS.
Integrations with both Coserv’s SCADA and IVR systems allow for a dual approach to reporting and response. The SCADA interface automatically enters SCADA-reported outages into Responder and displays them to system operators. Customer incident calls are passed directly from the IVR to Responder, and the IVR utilizes information from Responder to provide outage status information to callers and perform automated callbacks as necessary.
CoServ went into production with Responder in August 2005. The electric operations group, with up to five operators, employs the technology to locate outages and dispatch crews. <<
Sierra Pacific Resources to Build $3 Billion Power Complex/Transmission Project in Nevada
In early January, Sierra Pacific Resources announced its intention to move forward with development of a coal-fired power complex in eastern Nevada, and an approximately 250-mile transmission line that for the first time would provide an electric connection between the northern and southern parts of the state.
The power facility, which would be the largest energy development project in the state since Hoover Dam, will serve customers of Sierra Pacific Power Co. and Nevada Power Co. in northern and southern Nevada, respectively. It initially calls for two 750-MW units utilizing clean pulverized coal technologies. The plans also provide for expansion with two 500-MW coal gasification units when the technology becomes commercially viable. The company said the facility’s initial 750-MW operating unit is expected to become operational during 2011 with the second unit coming on stream within the following three years.
The planned transmission line not only will provide a tie between northern and southern Nevada, but also will address the company’s and the state’s emphasis on renewable energy resource development. The line will include several hundred megawatts of capacity for power generated by renewable resources in eastern and northern Nevada and will allow that power to be efficiently transported throughout the state.
Cost of the initial power complex/transmission line project is expected to exceed $3 billion. The two coal gasification units would be additional.
Walter Higgins, chairman and CEO of Sierra Pacific Resources, the parent of Nevada Power Company and Sierra Pacific Power Company, emphasized that the proposed power facility will directly address the state’s desire to diversify its energy sources away from a heavy reliance on expensive natural gas and, at the same time, will answer many environmental concerns by utilizing the latest “clean coal” technologies. It also will incorporate “hybrid cooling” thereby greatly reducing the amounts of water needed. “Equally important,” Higgins said, “by using a portion of our transmission line to transport electricity generated by renewable resources, we expect this project to help spur development of much-needed and desirable renewable energy within our state.” The company said it will release further details of the project in a forthcoming filing with the Public Utilities Commission of Nevada, which it expects to submit during February 2006.<<