FirstEnergy Purchases GPU's Capacity of the Seneca Plant

FirstEnergy Corp. has signed an agreement to purchase 87 megawatts of capacity of the Seneca Pumped-Storage Hydroelectric Generating Station from General Public Utilities (GPU). This transaction is expected to cost $43 million and is scheduled to be completed by June 1999.

The Seneca Plant began operation in 1970 as a jointly owned unit of GPU's Pennsylvania Electric Company (Penelec) and The Illuminating Company, which is now a FirstEnergy operating unit. The plant, which is located on the Allegheny River at the Kinzua Dam, produces low-cost electricity by pumping water to an upper reservoir during the night and then releases it through hydro turbine-generators during the daytime when the demand for electricity is at its peak.

When the sale is finalized, FirstEnergy plans to structure the 87 megawatts of capacity from Seneca as a non-regulated subsidiary. The companies are still waiting for approval from the Federal Energy Regulatory Commission and the Pennsylvania Public Utilities Commission.