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Industry News

Rhode Island Power Plant Pays its Electric Bill

LCG, Nov. 5, 2001--A subsidiary of PG&E Corp., the worried parent of bankrupt utility Pacific Gas & Electric Co., has agreed to pay its electric bill to Narragansett Electric Co. in Providence, R.I.

USGen New England, which is owned by PG&E National Energy Group, hasn't paid its bill for five years and, like all unpaid bills, it just kept getting bigger -- finally exceeding $525,000. But Narragansett won't get anywhere near that much and no one is saying how much USGen will pay.

In a settlement proposal filed late last week with the Rhode Island Public Utilities Commission, Narragansett agreed with USGen to keep the details secret. "We decided to deal with them the same way we deal with any other customer," said Ronald Gerwatowski, a lawyer for Narragansett.

Narragansett didn't hesitate to broadcast the amount owed during the summer when it was trying to either shame USGen into paying its bill or prod state regulators into forcing USGen to cough up a payment.

A question that occurs to many is, what is a company like USGen, which is widely known as a producer of electric power, doing falling behind on an electric bill?
In the late 1990s, US Generating (which has since become PG&E National Energy Group) bought a lot of New England power plants in states where electric restructuring was taking place. In 1998, the company purchased the Manchester Street Station in Providence from Narragansett.

When the 495 megawatt Manchester Street Station is closed for repairs or a tune-up, US Gen has to buy power elsewhere to fulfill its contracts. Narragansett says it sold USGen that replacement power, but USGen isn't sure, saying it gets its replacement power from other plants it owns.

Apparently it all depends on how you read the contracts.

Tom Powers, director of external relations and environmental affairs for USGen, said it just made sense to settle. "We both looked at the language in our contract and we came up with different conclusions," he said.

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