FirstEnergy Corp.
(NYSE:FE) has decided to retain ownership of its four coal-fired
power plants along Lake Erie after reviewing bids it received from
parties interested in buying the plants.
While details of
the bids remain confidential, FirstEnergy said the offers fell short
of the $1.5 billion agreement that had been reached to sell the Ohio
plants to Minneapolis-based NRG Energy Inc. That agreement was
announced late last year but was canceled by FirstEnergy in August
because of what the Akron-based utility called an "anticipatory
breach of certain obligations in the agreement" by an NRG affiliate.
"Based on the bids we received, retaining the plants to
serve our customers makes more sense than selling them," said
FirstEnergy president Anthony Alexander.
Because FirstEnergy
has decided to retain ownership of the four plants, it has taken an
after-tax charge of $43 million, or 15 cents a share. The charge is
for depreciation charges not recorded while the plants were pending
sale, and for transaction-related fees.
FirstEnergy said its
recently updated 2003 earnings guidance is unaffected by the
decision to retain ownership of the plants.
The plant
involved with the bidding were the 376-megawatt Ashtabula Plant in
Ashtabula, the 648-megawatt Bay Shore Plant in Oregon, the
1,262-megawatt Eastlake Plant in Eastlake, and 249-megawatt Lake
Shore Plant in Cleveland.
