EDITORS: Please do not use
"Pacific Gas and Electric" or "PG&E" when
referring to PG&E Corporation or its National Energy Group.
The PG&E National Energy Group is not the same company as Pacific
Gas and Electric Company, the utility, and is not regulated by the
California Public Utilities Commission. Customers of Pacific Gas
and Electric Company do not have to buy products or services from
the National Energy Group in order to continue to receive quality
regulated services from Pacific Gas and Electric Company.
LA PALOMA GENERATING PROJECT REACHES MILESTONE WITH RECORD FINANCING
Transaction is the largest
ever for a single greenfield competitive power plant in the U.S.
Bethesda, Md. – PG&E Corporation
(NYSE: PCG) today announced the completion of a $730 million financing
for its 1048-megawatt La Paloma Generating Project now under construction
in Southern California. The financing is the largest to date in
the United States for a single greenfield competitive power plant,
and the plant will be the largest in California built expressly
for the state's new competitive power market. The facility, slated
for operation in 2001, is one of 13 highly efficient natural gas-fueled
plants the Corporation plans to bring into service nationwide over
the next three years.
"PG&E Corporation's National
Energy Group is pursuing an aggressive strategy for growth in the
competitive power generation business," said Thomas G. Boren, executive
vice president of PG&E Corporation and president and CEO of the
Corporation's National Energy Group. "We currently are building
or developing 10,000 megawatts of clean, efficient, natural gas-fueled
generation, and we expect to continue to grow that development portfolio,"
he said. "Critical to reaching that goal is the strong financial
foundation we lay for our competitive power project portfolio. Innovative
structures such as the La Paloma financing and last year's award-winning
Lake Road project financing are enabling us to achieve our development
goals as planned, and are positioning our portfolio for long-term
The Corporation's landmark
financing for the Lake Road Generating Plant was recognized among
the best deals of 1999 in three trade publications; Global Finance,
Asset Finance International, and Corporate Finance magazines.
The financing for the La
Paloma facility is structured as a project-financed synthetic lease,
using a special securitized commercial paper facility, supported
by an equity commitment. According to John R. Cooper, senior vice
president and chief financial officer for the Corporation's generating
unit, the finance group replicated the documentation and other aspects
of the successful Lake Road transaction for the La Paloma project.
"By using the Lake Road financing's template in terms of structure,
technology, documentation, lead arrangers, attorneys, and advisors,
we saved millions of dollars in financing costs and fees," said
Cooper. "In addition, the banks reported that they saved time and
effort in explaining and documenting the transaction for their credit
The transaction's lead arranger/book
manager was Citibank/Salomon Smith Barney, Inc. Arrangers were Société
Générale and Deutsche Bank. Co-arrangers were BNP Paribas Group,
Credit Lyonnais, and Dresdner Kleinwort Benson. There were 23 additional
lenders, contributing to an over subscription in syndication.
The natural gas-fueled,
combined-cycle La Paloma Generating plant site is located approximately
40 miles west of Bakersfield, Calif. in western Kern County on an
industrial site previously used for oil production.
PG&E Corporation with 1999
operating revenues of nearly $21 billion and operations in 27 states,
markets energy services and products throughout North America through
its National Energy Group. The Corporation has ownership and management
interests in more than 30 power plants and has one of the largest
energy trading and risk management programs in North America.