Enron Capital & Trade Resources Will Buy NJ Power Plant

Enron Capital & Trade Resources (ECT), a wholly owned subsidiary of Enron Corp., has announced that it has reached a definitive agreement with Cogen Technologies to acquire its interests in three power plants for $1.1 billion and the assumption of approximately $350 million in non-recourse debt. The three natural gas-fired plants, located in Bayonne, Camden and Linden, NJ, have an aggregate generating capacity of 1,037 megawatts. Designated as "qualifying facilities" according to the Public Utilities Regulatory Practices Act of 1978, the plants deliver power and steam according to contract to utility and industrial customers in New Jersey and New York City.

ECT will make the acquisition through a special purpose entity in which ECT will own a 50% interest. The entity will invest up to $130 million in equity, with the balance of the purchase price funded by non-recourse borrowings provided by financial institutions. Both parties anticipate closing the transaction by early 1999.

According to ECT Chairman and CEO Kenneth D. Rice "This investment fits perfectly with ECT's core strengths in energy finance and power marketing. In addition to the long-term contracts, which allow us to arrange attractive financing and provide a stable return to our investors, the quality and locations of the plant sites, at key electric interconnect points in the Northeast grid, provide opportunities to expand capacity in one of the most energy-intensive and power-constrained regions in the United States."

"Cogen Technologies has been a leader in the New York and New Jersey power markets with highly efficient, environmentally clean plants that have set the standard for the east coast," says Robert C. McNair, chairman and CEO of Cogen Technologies. "Enron's leadership in the natural gas and electricity markets will complement the position of the assets in the regional power market."

Cogen Technologies was founded by Robert C. McNair in 1984 and has become the largest privately owned cogeneration company in the United States, with interests in plants with generating capacity of 1,382 megawatts. Cogen Technologies will retain its interests in a 345 megawatt natural gas-fired cogeneration facility in Selkirk, N.Y., and a 50 megawatt coal-fired cogeneration facility in Morgantown, WV.