FYI...
---------------------- Forwarded by Rob Milnthorp/CAL/ECT on 02/15/2000 11:21 
AM ---------------------------


Paul Devries
02/15/2000 06:48 AM
To: Jan Wilson/TOR/ECT@ECT, Rob Milnthorp/CAL/ECT@ECT, Eric LeDain/CAL/ECT@ECT
cc:  
Subject: DJ Ontario Power CEO: Up To 7,000 MW 'In Play' By End 1Q

More OPGI info...

cheers, Paul
---------------------- Forwarded by Paul Devries/TOR/ECT on 02/15/2000 07:18 
AM ---------------------------


"Pergher, Gunther" <Gunther.Pergher@dowjones.com> on 02/14/2000 03:13:49 PM
To: robmcl@access-capital.com, terry@access-capital.com, 
gelliott@aepr-canada.com, tdrolet@aepr-canada.com, acrowley@utilicorp.com, 
pbartsch@utilicorp.com, paul.blaha@atcopower.com, 
andrew.johnson@canagen.on.ca, david.gilchrist@canagen.on.ca, 
richard.harrobing@canagen.on.ca, VallasA@CNPower.com, 
ajperrin@duke-energy.com, jdpollock@duke-energy.com, 
martinm@encoreenergy.com, conway@enerconnect.com, Paul Devries/TOR/ECT@ECT, 
don.lee@iemo.com, b.williams@mercuryelectric.com, 
v.mantey@mercuryelectric.com, andrewst@est.gov.on.ca, jimc@northlandpower.ca, 
paulv@northlandpower.ca, norm.fraser@ohsc.com, aboschetti@torontohydro.com, 
rokashimo@torontohydro.com, bruce_mackay@transalta.com, 
david_backe@transalta.com, rocco_vita@transalta.com, 
joe_kirkpatrick@transalta.com, rob_campbell@transalta.com, 
dcaro@uniongas.com, keith_rawson@transcanada.com, dfrancis@uniongas.com, 
fhassan@uniongas.com
cc: "Olver, Lynne" <Lynne.Olver@dowjones.com> 
Subject: DJ Ontario Power CEO: Up To 7,000 MW 'In Play' By End 1Q 



DJ Ontario Power CEO: Up To 7,000 MW 'In Play' By End 1Q

 TORONTO (Dow Jones)--About 7,000 megawatts of Ontario Power Generation's
operating generating capacity will be "in play" by the end of the first
 quarter, company President and Chief Executive Ron Osborne said Monday.

 As reported, the oil-and-natural gas burning Lennox plant near Kingston,
and the coal-fired Lakeview generating plant in Mississauga have joined the
 Bruce nuclear plant on Ontario Power's divestiture list.

 Osborne said Ontario Power would like to auction the 2,140-megawatt Lennox
and 1,140-MW Lakeview plants before November, when Ontario's
 competitive electricity market is due to start.

 He refused to speculate on the plants' market values.

 "When added to the 2,700 megawatts of planned independent generation in
Ontario, and to the 1,700 megawatts that independent generators
 supply today, and the roughly 4,000 megawatts that can be brought into the
province through interconnections, by this time next year we could see
 up to 15,000 megawatts provided by other companies," Osborne said in a
luncheon speech.

 The company chose to put Lennox and Lakeview on the block because they are
peaking plants and thus frequently set prices in Ontario's near
 monopoly wholesale market, Osborne explained after his speech.

 Ontario Power has agreed to give up wholesale market share to enable more
competitors to participate in the upcoming spot market.

 The company must first "decontrol" or give up control over 4,000 MW of
price-setting plants, typically coal-fired or hydro powered.

 Lennox, whose four 535-MW oil-fired units have recently been reconfigured
to burn natural gas as well, is known as Ontario's "last-on, first-off"
plant
 because it is run when electricity demand is greatest.

 As for Lakeview, four of its eight coal-fired units aren't operational.

 The plant, located west of Toronto in Mississauga, was supposed to be the
site of a new natural-gas fired generating station called Lakeview New
 Generation. The project, announced in December 1998, was to be developed by
Ontario Power, Calgary-based Atco Power and two Ontario
 municipal utilities.

 One of the four partners, municipal distributor Hydro Mississauga, recently
withdrew from the project.

 A spokesman for Ontario Power said any sale of the site would likely
involve negotiations for the new gas project. "But as far as the partners
are
 concerned, it's still a viable proposition they're looking into," said the
spokesman.

 If Ontario Power's Bruce A nuclear station can be brought back into service
either by the company or by a new investor, "this would also contribute
 another 3,000 megawatts of clean electricity" to the provincial supply
picture, said Osborne.

 The company has met with "several potential partners" in its Bruce nuclear
plant and expects to report to its shareholder, the provincial government,
 in the next few weeks, he said.

 Jake Brooks, spokesman for Independent Power Producers Society of Ontario,
said the two divestitures announced Monday are important.

 "These are large enough power plants that it's a good step towards breaking
up the concentration of ownership in the power sector," he said.

 Ontario Power's small hydro-electric plants are also rumored to be for
sale, he said. It makes sense that the company would try to sell those, too,
 because they're best run by small operators, said Brooks.

 IPPSO's concern is that the divestitures be conducted in as open a manner
as possible, said Brooks.

 "And as we've said before, any proceeds over book value should be dedicated
to paying down the stranded debt of the former Ontario Hydro," he
 added.

 Ontario Power is the largest of five successor companies to Ontario Hydro,
which left behind a legacy of C$38.1 billion in outstanding debt and other
 liabilities when it was split up in April 1999.

 The successor companies are responsible for paying of a portion of that
debt, but the provincial finance ministry estimates C$7.8 billion of the
total
 is "residual stranded debt" that will likely be borne by electricity
customers.

 -By Lynne Olver, Dow Jones Newswires; 416-306-2020;
lynne.olver@dowjones.com

 Copyright (c) 2000, Dow Jones & Company Inc

G_nther A. Pergher
Senior Analyst
Dow Jones Newswires
Dow Jones & Co.
Tel.  609.520.7067
Fax. 609.452.3531

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