In the latest consolidation driven by the restructuring of the region's electricity industry, New England Electric System (NEES) and Eastern Utilities Associates (EUA) have signed a merger agreement under which NEES will acquire all outstanding shares of EUA.

In addition, NEES announced on Dec. 14, 1998 that it would merge with National Grid Group plc, the world's largest independent transmission company, which is based in Coventry, England. Upon completion of that merger, NEES will become a wholly owned subsidiary of National Grid.

The NEES/EUA merger is not contingent upon the NEES/National Grid merger closing, but has the full support of National Grid, according to Rick Sergel, president and CEO officer of NEES.

Upon completion of the NEES/EUA merger, EUA's operations will be merged into NEES's. The combined company will serve 1.6 million customers in 228 New England communities. The new company will serve the majority of electric customers in Massachusetts and Rhode Island.

The companies expect to file a rate plan with state regulators in the near future that will maintain NEES's low rates and bring EUA's rates to NEES levels in the future. Pending regulatory approvals, both mergers are expected to be completed by early 2000.

Guatemala's Electricity System to Be Rebuilt Union Fenosa plans to invest US$101 million in electrifying inland areas of Guatemala after acquiring 80% of the inland distribution company and administering the US$350 million fund for investment in boosting the level of electrification in inland areas. According to current projections, 10% of the fund will be used to improve the transmission system and 60% to develop distribution networks.

The Union Fenosa Group will alsoprovide experts to work on repairing the storm damaged distribution network and develop inland areas to achieve a level of electrification in excess of 90%.

Previously, the level of electrification was estimated at 52%.

The distribution system to be managed by Union Fenosa covers all of Guatemala except the capital city-600,000 customers at present. After the electrification program is complete, the system's expected to provide electricity to more than 7 million people, and the electricity grid will be equipped to handle more than double the present unit consumption per customer.

Three Companies Form Global Energy Partners Three of the United States' energy organizations-the Electric Power Research Institute, the Gas Research Institute and Daniel Mann Johnson Mendenhall-have combined forces to create Global Energy Partners LLC. The new partnership offers program management services to public agencies that fund public-benefit energy programs aimed at promoting energy efficiency.

Global Energy Partners plans to advance public benefit science and technology through their: - Expertise in energy and energy use - In-depth understanding of market transformation - Strong project management and administrative capabilities - Global network of information source, facilities and partnerships - Extensive experience with public/private partnerships.

Director Calls for Reform The reform of the United Kingdom electricity trading arrangement is a major priority, according to Callum McCarthy, director general of electricity and gas supply.

"We need trading arrangements that allow participants to compete fairly with one anotherand in which customers can have confidence," McCarthy said at a seminar at the NEC in Birmingham. McCarthy was speaking to industry representatives and consumer groups about progress on the review of electricity trading arrangements (RETA).

"I have no doubt that OFFER's recommendation to government last July on new trading arrangements represent the right way forward. These new trading arrangements will effectively link an increasingly competitive supply market to the generators. As such, they are a critical link in establishing competition throughout the electricity supply chain."

McCarthy also said that Pool prices were still unjustifiably high despite input costs for generators being significantly reduced. Fundamental flaws in the Pool system have allowed the major generators to insulate themselves from competitive pressures, and participants in the Pool have manipulated the Pool rules to their commercial ends, he continued. He stated that this behavior cannot continue.

Rate Freeze and Open Competition in Texas The state of Texas would freeze utility rates for nearly three years and open its US$20 billion a year electricity market to competition by 2002 under a bill filed in the state Senate.

The law proposed by Senators David Sibley, R-Waco, and Ken Armbrister, D-Victoris, would cut electricity rates by 5% beginning Jan. 1, 2002 and would save ratepayers roughly US$500 million a year, its sponsors said. But the measure would also allow rural cooperatives and municipalities to opt out of competition and not freeze their rates. Those providers-who helped defeat deregulation proposals in the Legislature two years ago-now say they support the move toward competition.

Brazilian Utility Selects Consortium Electrobras, a Brazilian utility, has selected an international consortium of engineering companies to provide engineering services on the company's recently energized North-South interconnection.

The consortium is comprised of U.S. company Power Technologies, Inc. (PTI) and three Brazilian companies: Hidro-service Engenharia Ltd., Enerconsult Engenharia Ltda., and Marte Engenharia Ltda. The services include an inventory of hydro potential, operational studies and transmission planning. As part of the consortium, PTI, with support from Stone & Webster Management Consultants, will develop a planning infrastructure and methodology applicable to the new Brazilian power industry.

Correction In the January 1999 issue of T&D World, the article "Advanced Technologies Lift the Industry to a Higher Level" incorrectly identified Powerlink Queensland as Power Queensland on page 42. In that same section, there was a conversion error on the amount Powerlink Queensland committed to its three new substations. The amount should have been US$19 million (AUS$30 million). T&D World apologizes for the errors.