2014

SNC-Lavalin To Replace Enron Subsidiary NEPCO On Projects For TECO/Panda Joint Venture, TECO Power Services Contracts Total Nearly 5,600 Megawatts Of Generation In Arizona,

Arkansas And Mississippi



    TAMPA, Fla., May 17 /PRNewswire-FirstCall/ -- TECO Power Services today
 announced that its TECO-Panda Generating Company joint venture has signed
 contracts with SNC-Lavalin Constructors Inc., a subsidiary of SNC-Lavalin
 Group, Inc., to replace NEPCO (an Enron subsidiary) and to complete the
 engineering and construction of the 2,205-megawatt Union Power Station and the
 2,145-megawatt Gila River Power Station.  Union is located in El Dorado,
 Arkansas, and Gila River is located in Gila Bend, Arizona.
    In addition, TECO Power Services announced that it has signed contracts
 with SNC-Lavalin to replace NEPCO and complete two additional facilities, the
 599-megawatt Dell Power Station in Dell, Arkansas, and the 599-megawatt
 McAdams Power Station in Kosciusko, Mississippi.  These two projects are
 wholly owned by subsidiaries of TECO Power Services.
    Coincident with the execution of the four contracts, SNC-Lavalin
 Constructors Inc. will hire substantially all of NEPCO's management and staff.
 As a result, management and staff overseeing the projects will remain the
 same, ensuring continuity, job knowledge and maintenance of the construction
 quality and schedule.  The projects will be completed on a cost-plus-fee
 basis, with the fee portion at-risk until the completion of the projects.  The
 new contracts and the NEPCO termination will become effective at midnight on
 May 17, 2002.
     TECO Power Services President Rick Ludwig said, "This is good news for the
 projects and for TECO Energy.  SNC-Lavalin Constructors Inc. is backed by SNC-
 Lavalin Group's excellent reputation and years of experience in industrial
 construction.  With this financially stable company, we are confident our
 projects will continue on schedule, using the same highly qualified personnel
 to oversee the process.  In addition, this eliminates the risk that the
 projects would be drawn into the Enron bankruptcy, which could have impacted
 our large project financing."
     SNC-Lavalin's Executive Vice President-Power Klaus Triendl said, "The
 NEPCO team's know-how and experience, combined with SNC-Lavalin's existing
 thermal power expertise, will benefit all four of these major independent
 power construction projects."
 
     GILA RIVER AND UNION
     TECO-Panda Generating Company has already obtained approval from the
 lending bank group financing the construction of the Gila River and Union
 power stations for the new contracts with SNC-Lavalin Constructors Inc.  No
 interruption of funding will occur.  TECO Energy remains responsible for
 potential construction cost overruns for the two projects.  This amount
 (including additional oversight and other requirements of the lending bank
 group and credits for improvements in other project costs), previously
 estimated to be approximately $63-million for the two joint venture projects
 is now estimated to be approximately $90 million with the SNC-Lavalin
 arrangement.
 
     DELL AND MCADAMS
     Work on project financing of TECO Power Services' Dell and McAdams
 facilities is underway and expected to be completed later this year.  The
 potential EPC-related construction cost overruns, including estimates for
 additional oversight and other requirements necessary to complete the
 financing, previously estimated to be approximately $17 million, are now
 estimated to be approximately $27 million with the SNC-Lavalin arrangement.
 
     OVERALL IMPACT
     As previously reported by TECO Energy, construction cost overruns
 associated with the four projects were the result of Enron's centralized cash
 management procedures, which "swept" funds before they were applied to pay
 project costs. The exposure for cost overruns under the NEPCO contracts was
 significantly mitigated by each project drawing on NEPCO letters of credit, as
 well as NEPCO's agreement to forego profit and eliminate certain contingency
 amounts.
     Overall, the four projects' estimated $117 million in potential net cost
 overruns outlined above will be amortized over 30 years and represent a small
 increase relative to the $3.4-billion estimated total cost for these projects.
 In addition, the project budgets contain contingency amounts still available
 that could absorb most of these overruns if the amounts are not needed for
 other purposes.
 
     ABOUT THE COMPANIES
     TECO Power Services is a subsidiary of TECO Energy, Inc. (NYSE:   TE), a
 Tampa-based energy holding company included in the S&P 500 Index, with more
 than $2.6 billion in revenues.  TECO Power Services builds, owns and operates
 independent power plants, with an emphasis on high growth areas of North
 America.  Other TECO Energy subsidiaries include Tampa Electric, Peoples Gas,
 TECO Transport, TECO Coal, TECO Coalbed Methane and TECO Solutions.  TECO
 Energy as a whole has nearly 11,000 megawatts of electric generation, either
 operating or in construction.
     SNC-Lavalin (Toronto: SNC) is one of the leading groups of engineering and
 construction firms in the world and a global leader in the ownership and
 management of infrastructure.  The SNC-Lavalin group of companies has over
 14,000 employees in offices across Canada and in 30 other countries around the
 world.  SNC-Lavalin is currently working in some 100 countries.
 
     Note:  This press release contains forward-looking statements, which are
 subject to the inherent uncertainties in predicting future results and
 conditions.  Certain factors that could cause actual results to differ
 materially from those projected in these forward-looking statements include
 SNC-Lavalin Constructors Inc.'s ability to complete construction of the Union,
 Gila River, Dell and McAdams power stations on schedule and according to plan
 and TECO Power Services' ability to complete financing for the Dell and
 McAdams facilities.  Additional factors are discussed under "Investment
 Considerations" in TECO Energy's Annual Report on Form 10-K for the year ended
 December 31, 2001, and reference is made hereto.
 
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SOURCE TECO Power Services

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