test2_wsj_2309

Atco Ltd. said its utilities arm is considering building new electric power plants, some valued at more than one billion Canadian dollars (US$851 million), in Great Britain and elsewhere. 

C.S. Richardson, Atco's senior vice president, finance, said its 50.1%-owned Canadian Utilities Ltd. unit is reviewing cogeneration projects in eastern Canada, and conventional electric power generating plants elsewhere, including Britain, where the British government plans to allow limited competition in electrical generation from private-sector suppliers as part of its privatization program. 

"The projects are big.
They can be C$1 billion plus," Mr. Richardson said. "But we wouldn't go into them alone," and Canadian Utilities' equity stake would be small, he said. "Ideally, we'd like to be the operator {of the project} and a modest equity investor.
Our long suit is our proven ability to operate" power plants, he said. 

Mr. Richardson wouldn't offer specifics regarding Atco's proposed British project, but he said it would compete for customers with two huge British power generating companies that would be formed under the country's plan to privatize its massive water and electric utilities. 

Britain's government plans to raise about #20 billion ($31.05 billion) from the sale of most of its giant water and electric utilities, beginning next month.
The planned electric utility sale, scheduled for next year, is alone expected to raise #13 billion, making it the world's largest public offering. 

Under terms of the plan, independent generators would be able to compete for 15% of customers until 1994, and for another 10% between 1994 and 1998. 

Canadian Utilities had 1988 revenue of C$1.16 billion, mainly from its natural gas and electric utility businesses in Alberta, where the company serves about 800,000 customers. 

"There seems to be a move around the world to deregulate the generation of electricity," Mr. Richardson said, and Canadian Utilities hopes to capitalize on it. "This is a real thrust on our utility side," he said, adding that Canadian Utilities is also mulling projects in underdeveloped countries, though he would be specific. 

Canadian Utilities isn't alone in exploring power generation opportunities in Britain, in anticipation of the privatization program. "We're certainly looking at some power generating projects in England," said Bruce Stram, vice president, corporate strategy and corporate planning, with Enron Corp., Houston, a big natural gas producer and pipeline operator. 

Mr. Stram said Enron is considering building gas-fired power plants in the U.K. capable of producing about 500 megawatts of power at a cost of about $300 million to $400 million.