OPG Starts Process To Decontrol 1,015 MW Of Capacity

TORONTO - -- Ontario Power Generation (OPG) has announced it has directed its financial advisors, Merrill Lynch Canada and Scotia Capital, to initiate the first phase of the process to decontrol the 310 megawatt (MW) Thunder Bay Station, the 215 MW Atikokan Station in northwestern Ontario, and the 490 MW combined output of the four Mississagi River Generating Stations (Aubrey Falls, George W. Rayner, Red Rock Falls and Wells) near Sault Ste. Marie. The financial advisors are inviting expressions of interest from parties that may be interested in operating or acquiring the stations. With this first step, the advisors will be able to determine the initial level of interest in these facilities while the government completes a review of environmental protection proposals.

Our financial advisors will initiate the second phase of the decontrol process, but will not complete this phase until the government finalizes their environmental review. The government will be in a position to lift the moratorium on the sale of coal-fired plants following a consultation period, through the Environmental Bill of Rights Registry. As part of the environmental review, new proposed emission caps have been posted on the Environmental Bill of Rights registry and public consultation is currently under way. It is anticipated that this review will be completed in the near future.

During this first phase, the advisors will be inviting Expressions of Interest in these generating stations from qualified bidders. Subsequent steps will involve the selection of a number of parties who will be invited to make final binding offers. The process is expected to be completed within the next six to nine months, subject to finalization of the related environmental protection proposals and the lifting of the coal moratorium.

Transferring control of these facilities will promote competition by adding new players to OntarioÂ’s electricity market and by reducing OPGÂ’s control over generating capacity in the province. OntarioÂ’s electricity market is expected to open by May 2002.

Currently, OPG is proceeding with decontrol initiatives for its Lakeview and Lennox generating stations, and earlier this year concluded a long-term lease agreement with Bruce Power for its Bruce nuclear generation facilities.

Ontario Power Generation is an Ontario based company, whose principal business is the generation and sale of electricity to customers in Ontario and to interconnected markets. OPGÂ’s goal is to be a premier North American energy company, focused on low-cost power generation and wholesale energy sales while operating in a safe, open and environmentally responsible manner.