|
Lilco agreement reached
|
 |
March 19, 1997: 9:21 a.m. ET
Utility splits electric system to LIPA , natural gas to Brooklyn Union
|
NEW YORK (CNNfn) - The Brooklyn Union Gas Co. and the Long Island Lighting Co. said Wednesday they agreed in principle to sell some assets to the Long Island Power Authority.
Under terms of the deal, LIPA, a New York state agency formed in 1986 to take over Lilco, will get Lilco's electric transmission and distribution system. It will also assume control of most of its regulatory assets, including the troubled Shoreham nuclear power plant.
Brooklyn Union will get Lilco's remaining generation and natural-gas systems as part of a previous merger announced in December.
LIPA will acquire its properties from an as yet unnamed holding company to be formed from Brooklyn Union and Lilco for about $2.5 billion in cash and an additional assumption of approximately $3.6 billion in debt.
The deal is subject to board, shareholder and regulatory review. The companies said they expect the deal to be officially completed in about 18 months.
The reaching of an agreement could mean relief for Long Island utility consumers, who pay the highest electric rates in the country.
The Shoreham nuclear plant, which was built but never made operational due concerns after the Three Mile Island nuclear plant incident in 1979, created a debt that raised rates for customers. Customers can now expect a possible rate reduction of 15 percent to 20 percent, the companies said.
Lilco has 5,400 employees and provides electric and gas service to more than one million customers on Long Island.
Brooklyn Union distributes natural gas to 1.1 million customers in the New York City boroughs of Brooklyn, Staten Island and Queens and employs 3,000 people.
Lilco's stock (LIL) remained unchanged at 23-7/8 on the New York Stock Exchange Tuesday. Brooklyn Union shares (BU) closed at 29-1/8 Tuesday, a gain of 1/8.
--Randy Schultz
|
|
|
|
|
 |
|
