DAEC Sale to Move Forward
CEDAR RAPIDS, Iowa, Jan. 19 - Interstate Power and Light Company (IP&L), a subsidiary of Alliant Energy Corporation (NYSE: LNT) and FPL Energy LLC, a subsidiary of FPL Group, Inc. (NYSE: FPL) announced today that the companies received affirmative regulatory decisions regarding the sale of the Duane Arnold Energy Center (DAEC), its nuclear generating facility located near Palo, Iowa.
(Logo: http://www.newscom.com/cgi-bin/prnh/20020405/LNTLOGO )
Today, the Minnesota Public Utilities Commission (MPUC) approved the sale of DAEC by a 4-1 margin, determining that the sale transaction was in the public interest. Yesterday, the Iowa Utilities Board (IUB) reaffirmed its November 30, 2005 Order approving the DAEC sale.
The transaction has already received regulatory approval from the Federal Energy Regulatory Commission, Illinois Commerce Commission (ICC), IUB and Public Service Commission of Wisconsin. FPL Energy and IP&L also received approval from the Nuclear Regulatory Commission to transfer the company's DAEC nuclear operating license to FPL Energy.
"Our company is pleased that the regulatory process is nearing a conclusion and our company appreciates the diligent work of our regulatory entities," says Tom Aller, President-IP&L. "We look forward to working with FPL Energy to close the transaction and commencing a long-term energy partnership with the company."
"The MPUC's decision and IUB's reaffirmation of their November 2005 decision are major milestones in the regulatory approval process," states Mike O'Sullivan, Senior Vice President of Development -- FPL Energy, LLC. "Our company applauds the efforts of the regulators to ensure that the process was equitable and transparent to all parties."
Alliant Energy Corporation is an energy-services provider with subsidiaries serving more than three million customers. Providing its customers in the Midwest with regulated electricity and natural gas service remains the company's primary focus. Interstate Power and Light, the company's Iowa utility subsidiary, serves 535,000 electric and 238,000 natural gas customers. Alliant Energy, headquartered in Madison, Wis., is a Fortune 1000 company traded on the New York Stock Exchange under the symbol LNT. For more information, visit the company's Web site at http://www.alliantenergy.com .
Alliant Energy Forward-Looking Statement
This press release includes forward-looking statements. These forward-looking statements can be identified as such because the statements include words such as "intend" or other words of similar import. Similarly, statements that describe future plans or strategies are also forward-looking statements. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Actual results could be affected by such factors as: the parties' ability to obtain regulatory approval of the sale of the DAEC; unanticipated events (for example, a shutdown) at the DAEC prior to closing of the sale; unanticipated legal or regulatory challenges to the sale of DAEC; and changes in legislation or the regulatory climate applicable to the DAEC. These factors should be considered when evaluating the forward-looking statements and undue reliance should not be placed on such statements. The forward-looking statements included herein are made as of the date hereof and Alliant Energy and IPL undertake no obligation to update publicly such statements to reflect subsequent events or circumstances.
FPL Energy is a leading wholesale generator of clean power utilizing natural gas, wind, solar, hydroelectric and nuclear. It is the nation's leader in wind energy, with 44 wind facilities in operation in 15 states. It is a subsidiary of FPL Group, one of the nation's largest providers of electricity-related services with annual revenues of more than $10 billion. FPL Group's principal subsidiary is Florida Power & Light Company, one of the nation's largest electric utilities, serving 4.3 million customer accounts in Florida. Additional information is available on the Internet at http://www.FPLEnergy.com , http://www.FPLGroup.com and http://www.FPL.com .
FPL Group Cautionary Statements And Risk Factors That May Affect Future Results
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (Reform Act), FPL Group, Inc. and its subsidiaries (FPL Group) is hereby providing cautionary statements identifying important factors that could cause FPL Group's actual results to differ materially from those projected in forward-looking statements (as such term is defined in the Reform Act) made by or on behalf of FPL Group in this press release, in presentations, on its website, in response to questions or otherwise. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as will likely result, are expected to, will continue, is anticipated, believe, could, estimated, may, plan, potential, projection, target, outlook) are not statements of historical facts and may be forward-looking. Forward-looking statements involve estimates, assumptions and uncertainties. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the following important factors (in addition to any assumptions and other factors referred to specifically in connection with such forward-looking statements) that could cause FPL Group's actual results to differ materially from those contained in forward-looking statements made by or on behalf of FPL Group.
Any forward-looking statement speaks only as of the date on which such statement is made, and FPL Group undertakes no obligation to update any forward-looking statement to reflect events or circumstances, including unanticipated events, after the date on which such statement is made. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.
The following are some important factors that could have a significant impact on FPL Group's operations and financial results, and could cause FPL Group's actual results or outcomes to differ materially from those discussed in the forward-looking statements:
-- FPL Group is subject to changes in laws or regulations, including
the Public Utility Regulatory Policies Act of 1978, as amended
(PURPA), the Public Utility Holding Company Act of 1935, as
amended (Holding Company Act), the Federal Power Act, the Atomic
Energy Act of 1954, as amended, the Energy Policy Act of 2005 and
certain sections of the Florida statutes relating to public
utilities, changing governmental policies and regulatory actions,
including those of the Federal Energy Regulatory Commission
(FERC), the Florida Public Service Commission (FPSC) and the
utility commissions of other states in which FPL Group has
operations, and the U.S. Nuclear Regulatory Commission (NRC), with
respect to, among other things, allowed rates of return, industry
and rate structure, operation of nuclear power facilities,
operation and construction of plant facilities, operation and
construction of transmission facilities, acquisition, disposal,
depreciation and amortization of assets and facilities, recovery
of fuel and purchased power costs, decommissioning costs, return
on common equity (ROE) and equity ratio limits, and present or
prospective wholesale and retail competition (including but not
limited to retail wheeling and transmission costs). The FPSC has
the authority to disallow recovery by Florida Power & Light
Company (FPL) of any and all costs that it considers excessive or
imprudently incurred.
-- The regulatory process generally restricts FPL's ability to grow
earnings and does not provide any assurance as to achievement of
earnings levels.
-- FPL Group is subject to extensive federal, state and local
environmental statutes, rules and regulations relating to air
quality, water quality, waste management, wildlife mortality,
natural resources and health and safety that could, among other
things, restrict or limit the output of certain facilities or the use
of certain fuels required for the production of electricity and/or
require additional pollution control equipment and otherwise increase
costs. There are significant capital, operating and other costs
associated with compliance with these environmental statutes, rules
and regulations, and those costs could be even more significant in the
future.
-- FPL Group operates in a changing market environment influenced by
various legislative and regulatory initiatives regarding deregulation,
regulation or restructuring of the energy industry, including
deregulation of the production and sale of electricity. FPL Group and
its subsidiaries will need to adapt to these changes and may face
increasing competitive pressure.
-- FPL Group's results of operations could be affected by FPL's ability
to renegotiate franchise agreements with municipalities and counties
in Florida.
-- The operation of power generation facilities involves many risks,
including start up risks, breakdown or failure of equipment,
transmission lines or pipelines, use of new technology, the dependence
on a specific fuel source, including the supply and transportation of
fuel, or the impact of unusual or adverse weather conditions
(including natural disasters such as hurricanes), as well as the risk
of performance below expected or contracted levels of output or
efficiency. This could result in lost revenues and/or increased
expenses. Insurance, warranties or performance guarantees may not
cover any or all of the lost revenues or increased expenses, including
the cost of replacement power. In addition to these risks, FPL Group's
nuclear units face certain risks that are unique to the nuclear
industry including the ability to store and/or dispose of spent
nuclear fuel, as well as additional regulatory actions up to and
including shutdown of the units stemming from public safety concerns,
whether at FPL Group's plants, or at the plants of other nuclear
operators. Breakdown or failure of an FPL Energy, LLC (FPL Energy)
operating facility may prevent the facility from performing under
applicable power sales agreements which, in certain situations, could
result in termination of the agreement or incurring a liability for
liquidated damages.
-- FPL Group's ability to successfully and timely complete its power
generation facilities currently under construction, those projects yet
to begin construction or capital improvements to existing facilities
within established budgets is contingent upon many variables and
subject to substantial risks. Should any such efforts be unsuccessful,
FPL Group could be subject to additional costs, termination payments
under committed contracts, and/or the write-off of its investment in
the project or improvement.
-- FPL Group uses derivative instruments, such as swaps, options, futures
and forwards, to manage their commodity and financial market risks,
and, to a lesser extent, engage in limited trading activities. FPL
Group could recognize financial losses as a result of volatility in
the market values of these contracts, or if a counterparty fails to
perform. In the absence of actively quoted market prices and pricing
information from external sources, the valuation of these derivative
instruments involves management's judgment or use of estimates. As a
result, changes in the underlying assumptions or use of alternative
valuation methods could affect the reported fair value of these |
contracts. In addition, FPL's use of such instruments could be subject
to prudency challenges and if found imprudent, cost recovery could be
disallowed by the FPSC.
-- There are other risks associated with FPL Energy. In addition to risks
discussed elsewhere, risk factors specifically affecting FPL Energy's
success in competitive wholesale markets include the ability to |
efficiently develop and operate generating assets, the successful and
timely completion of project restructuring activities, maintenance of
the qualifying facility status of certain projects, the price and
supply of fuel (including transportation), transmission constraints,
competition from new sources of generation, excess generation capacity
and demand for power. There can be significant volatility in market
prices for fuel and electricity, and there are other financial,
counterparty and market risks that are beyond the control of FPL
Energy. FPL Energy's inability or failure to effectively hedge its
assets or positions against changes in commodity prices, interest
rates, counterparty credit risk or other risk measures could
significantly impair FPL Group's future financial results. In keeping
with industry trends, a portion of FPL Energy's power generation
facilities operate wholly or partially without long-term power
purchase agreements. As a result, power from these facilities is sold
on the spot market or on a short-term contractual basis, which may
affect the volatility of FPL Group's financial results. In addition,
FPL Energy's business depends upon transmission facilities owned and
operated by others; if transmission is disrupted or capacity is
inadequate or unavailable, FPL Energy's ability to sell and deliver
its wholesale power may be limited.
-- FPL Group is likely to encounter significant competition for
acquisition opportunities that may become available as a result of the
consolidation of the power industry, in general, as well as the
passage of the Energy Policy Act of 2005. In addition, FPL Group may
be unable to identify attractive acquisition opportunities at
favorable prices and to successfully and timely complete and integrate
them.
-- FPL Group relies on access to capital markets as a significant source
of liquidity for capital requirements not satisfied by operating cash
flows. The inability of FPL Group, FPL Group Capital Inc (FPL Group
Capital) and FPL to maintain their current credit ratings could affect
their ability to raise capital on favorable terms, particularly during
times of uncertainty in the capital markets, which, in turn, could
impact FPL Group's ability to grow its businesses and would likely
increase interest costs.
-- FPL Group's results of operations are affected by the growth in
customer accounts in FPL's service area. Customer growth can be
affected by population growth as well as economic factors in Florida,
including job and income growth, housing starts and new home prices.
Customer growth directly influences the demand for electricity and the
need for additional power generation and power delivery facilities at
FPL.
-- FPL Group's results of operations are affected by changes in the
weather. Weather conditions directly influence the demand for
electricity and natural gas and affect the price of energy
commodities, and can affect the production of electricity at wind and
hydro-powered facilities.
-- FPL Group's results of operations can be affected by the impact of
severe weather which can be destructive, causing outages and property
damage, may affect fuel supply and could require additional costs to
be incurred. At FPL, recovery of these costs is subject to FPSC
approval.
-- FPL Group is subject to costs and other effects of legal and
administrative proceedings, settlements, investigations and claims, as
well as the effect of new, or changes in, tax laws, rates or policies,
rates of inflation, accounting standards, securities laws or corporate
governance requirements.
-- FPL Group is subject to direct and indirect effects of terrorist
threats and activities. Generation and transmission facilities, in
general, have been identified as potential targets. The effects of
terrorist threats and activities include, among other things,
terrorist actions or responses to such actions or threats, the
inability to generate, purchase or transmit power, the risk of a
significant slowdown in growth or a decline in the U.S. economy, delay
in economic recovery in the United States, and the increased cost and
adequacy of security and insurance.
-- FPL Group's ability to obtain insurance, and the cost of and coverage
provided by such insurance, could be affected by national, state or
local events as well as company-specific events.
-- FPL Group is subject to employee workforce factors, including loss or
retirement of key executives, availability of qualified personnel,
collective bargaining agreements with union employees and work
stoppage.
The issues and associated risks and uncertainties described above are not the only ones FPL Group may face. Additional issues may arise or become material as the energy industry evolves. The risks and uncertainties associated with these additional issues could impair FPL Group's businesses and financial results in the future.
