EXHIBIT 99 (i) 11
Niagara Mohawk, NYSEG, Rochester Gas and Electric and Central Hudson
to sell Nine Mile Point nuclear assets to Constellation Nuclear
in deal valued at $1.04 billion
Value includes $815 million in cash and payments, $134 million in interest
and $88 million in decommission savings
Syracuse-- Dec. 12 - Niagara Mohawk Power Corp. will sell its ownership of
the Nine Mile Point 1 and 2 nuclear plants, and New York State Electric & Gas
Corp., (NYSEG) Rochester Gas and Electric Corp., and Central Hudson Gas &
Electric Corp. have agreed to sell their ownership of the Nine Mile 2 nuclear
plant, to Constellation Nuclear, under an agreement announced today.
Constellation Nuclear was the successful bidder in a competitive auction
for the plants. The purchase price is $815 million in cash and payments and $134
million in interest for 82 percent of the 1,148-megawatt Nine Mile Point 2 plant
and 100 percent of the 609-megawatt Nine Mile Point 1 plant. Of the purchase
price, $407.5 million will be paid at closing and another $407.5 million in
principal and $134 million in interest will be paid in five annual payments. The
total of payments and interest for the 82 percent of Nine Mile 2 is $676.6
million. The total of payments and interest for Nine Mile 1 is $272.6 million.
The sellers' pre-existing decommission funds will be transferred to
Constellation, who will take responsibility for all future decommissioning
funding. No additional funding from the sellers is required, a saving to the
sellers of $88 million.
Constellation Nuclear, a wholly owned subsidiary of Constellation Energy
(NYSE:CEG), is the owner and operator of the two-unit Calvert Clifts nuclear
plant in Maryland.
-more-
300 Erie Boulevard West, Syracuse, New York 13202-4250 315.474.1511
www.niagaramohawk.com
<PAGE>
Page 2
Niagara Mohawk is a wholly owned subsidiary of Niagara Mohawk Holdings,
Inc. (NYSE:NMK). NYSEG is a wholly owned subsidiary of Energy East Corp. (NYSE:
EAS). Rochester Gas and Electric is a wholly owned subsidiary of RGS Energy
Group (NYSE: RGS). Central Hudson is a wholly owned subsidiary of CH Energy
Group, Inc. (NYSE:CHG). The Long Island Power Authority, an 18 percent owner of
Nine Mile 2, is not participating in the sale.
The sale is consistent with an April New York State Public Service
Commission order urging the owners to determine the market value of the plants
through an open, competitive process. Department of Public Service staff
participated in the auction process.
Niagara Mohawk will receive $145 million at closing and five annual
principal and interest payments totaling $193 million for its 41 percent
ownership share of Nine Mile 2. NYSEG will receive $64 million at closing and
five annual principal and interest payments totaling $85 million for its 18
percent ownership share of Nine Mile 2. Rochester Gas and Electric will receive
$ 50 million at closing and five annual principal and interest payments totaling
$66 million for its 14 percent ownership share of Nine Mile 2. Central Hudson
will receive $32 million at closing and five annual principal and interest
payments totaling $42 million for its 9 percent ownership share of Nine Mile 2.
Niagara Mohawk will also receive $117 million at closing and five annual
principal and interest payments totaling $155 million for its 100 percent
ownership share of Nine Mile 1. All payments are subject to purchase price
adjustments at the time of closing.
Also part of the transaction is a purchase power agreement calling for
Constellation Nuclear to provide electricity to the sellers at negotiated
competitive prices for approximately 10 years. After the completion of the
purchase power agreement a revenue sharing agreement begins, which will provide
a hedge against electricity price increases and could provide the sellers
additional future revenue through 2021. Both the purchase power agreement and
the revenue sharing agreement are based on plant output.
The sale of the plants furthers the state's initiative to separate
electricity generation from transmission and distribution, said Niagara Mohawk
chairman and chief executive officer William E. Davis, speaking on behalf of the
selling utilities.
"The competitive auction process maximized the value for the plants and
puts them in the hands of a proven nuclear organization committed to the
continued safe and efficient operations of the plants," Davis said. "The sale
also protects customers and shareholders from unforeseen operating and
decommissioning costs."
-more-
300 Erie Boulevard West, Syracuse, New York 13202-4250 315.474.1511
www.niagaramohawk.com
<PAGE>
Page 3
As part of the agreement, Constellation Nuclear will offer to continue
employment to the approximately 1,330 employees at the two plants and will
become the successor to the collective bargaining agreement with the
International Brotherhood of Electrical Workers Local 97.
The Nuclear Regulatory Commission, Federal Energy Regulatory Commission,
New York State Public Service Commission, and other regulatory bodies must
approve the sale. The transaction is targeted to close in mid-2001.
Constellation Energy, parent company of Constellation Nuclear, is a
holding company whose subsidiaries include energy-related businesses focused
mostly on power marketing, generation and portfolio management, plus BGE, which
provides service to more than 1.1 million electric customers and 590,000 natural
gas customers in Central Maryland.
Nine Mile Point is a two-unit boiling water reactor site. Nine Mile 1
began producing electricity in 1969. Nine Mile 2 began producing electricity in
1988. Niagara Mohawk operates both plants. The plants are located in Scriba,
N.Y., approximately 40 miles north of Syracuse.
J. P. Morgan & Co. Inc. acted as co-auction manager and financial
advisor to Niagara Mohawk and NYSEG.
Navigant Consulting Inc. acted as co-auction manager and financial
advisor to Rochester Gas and Electric and Central Hudson.
Note to Editors:
A media conference call will be conducted today at 11:15 a.m. Eastern
Standard Time. To join the conference call, please dial 1-800-683-1535 after
11:05 a.m., ask to be connected to the "Nuclear Plants" call. For those unable
to join the call at that time, a replay will be available for 48 hours by
calling 866-334-7071.
Media Contacts:
Niagara Mohawk - Alberto Bianchetti 315-349-7183
NYSEG - Clayton Ellis 607-762-7336
RG&E - Mike Power 716-724-8828
Central Hudson - Denise VanBuren 845-471-8323
-more-
300 Erie Boulevard West, Syracuse, New York 13202-4250 315.474.1511
www.niagaramohawk.com
<PAGE>
Page 4
Investor Contacts:
Niagara Mohawk - Leon T. Mazur 315-428-5876
NYSEG - Thorn Dickinson 607-347-2561
RG&E - Mark Graham 716-724-8176
Central Hudson - Steven V. Lant 845-486-5254
NOTE: This release contains statements that constitute forward-looking
information. Words such as "will" and "expect" and similar expressions are
intended to identify forward-looking statements. Such forward-looking statements
are subject to certain risks, uncertainties and assumptions. All of these
forward-looking statements are based on estimates and assumptions made by the
company's management which, although believed by the company's management to be
reasonable, are inherently uncertain. Such forward-looking statements are not
guarantees of future performance or results and involve certain risks and
uncertainties. Actual results or developments may differ materially from the
forward-looking statements as a result of various factors.
###
