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LIPA may acquire Lilco
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March 3, 1997: 7:44 a.m. ET
$5 billion acquisition would end long controversy over Shoreham plant
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NEW YORK (CNNfn) - After a decade of on-again, off-again talks, the Long Island Power Authority is reportedly close to acquiring most of Long Island Lighting Co. for about $5 billion.
The price includes about $4 billion for a so-called "regulatory asset," the Shoreham nuclear-power plant which was built but never opened, according to Monday's Wall Street Journal.
The New York state agency, known as LIPA, is also planning to acquire Lilco's electric-transmission and distribution business, the Journal said.
If the deal goes through, Lilco would be split in two, with its remaining gas and power-generation units becoming part of Brooklyn Union Gas Co. from a previous merger.
New York Governor George Pataki is a proponent of the tenuous deal, which could still fall to political objections, the Journal said.
The deal is also vulnerable to a ruling by the Internal Revenue Service. About $5 billion in municipal bonds would be issued to pay for the acquisition and authorities are seeking IRS assurance that the bonds will be tax-free, making the deal economically feasible.
The Lilco-LIPA pact would end the controversy over the Shoreham plant, which was closed after the 1979 Three Mile Island nuclear plant incident.
The loss of the plant has left Lilco with the highest electric rates in the continental U.S. 
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Lilco
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