Westinghouse Electric Corp. has signed a definitive agreement to sell its Power Generation business unit to Siemens for US$1.525 billion in cash. The transaction, which is subject to conditions, including completion of Hart-Scott-Rodino review, is expected to close by the end of the third quarter of 1998. The remaining industrial businesses are expected to be divested from the media company by mid-1990. The company also announced that the Westinghouse Electric Corp. will be renamed the CBS Corporation and trade under the CBS ticker symbol effective Dec. 1, 1997.
Commenting on the change to the company's former plans to spin-off the industrial company by year's end, Michael H. Jordan, Westinghouse chairman and chief executive officer, said, "Consolidation and change in the global power industry have created a strong demand for Westinghouse's power generation business. This revision to our plan will deliver more overall value to our shareholders and supports the interests of our power generation customers by ensuring a stronger and more competitive supplier."
The remaining industrial businesses--Energy Systems, Process Control and Government Operations--will report to Dr. Charles W. Pryor Jr., currently head of the Energy Systems business unit. He will assume the position of president and chief executive officer of the Westinghouse Electric Co., reporting to Jordan.
Price Is Biggest Factor in Choosing Supplier The lowest price per kilowatt-hour is the number one factor customers in the United Kingdom use to select a supplier, according to a recent survey by AXS Marketing, Syracuse, New York, U.S., and KWM Ltd., UK.
Customers were resounding in their unwillingness to pay more for value-added services such as equipment installation/maintenance, re-bundled utility services and energy management systems, the survey found. In fact, customers were skeptical of companies that presented themselves as can-do-everything energy service companies. In addition, supplier margins were small as customer loyalty took a back seat to price.
One thousand UK commercial and industrial customers were surveyed for the study. "The principal objective of this study has been to learn how customers and competitors behave when competitive markets for electricity have matured and stabilized," said Jeff Percival, KWM's managing director.
The similarities in business practices and decision making between the United Kingdom and North America make the UK an excellent pointer market, according to the surveyors.
While the detailed findings of this study are only being made available to companies funding the study, Percival noted that the results should cause utility affiliates, energy marketers and the like to give pause to notions of "pockets filled with gold" in a deregulated retail electricity market.
U.S. Utilities Enter Overseas Partnerships Two U.S. utilities have entered partnerships with utilities outside the United States. In November, PacifiCorp, Portland, Oregon, U.S., signed a partnership agreement with the Visayan Electric Co. (VECO), which serves the metropolitan area of Cebu City, the second largest city in the Philippines. In October, DQE, Pittsburgh, Pennsylvania, U.S., signed a partnership agreement with the Karnataka Electricity Board and the Karnataka Power Corp. Ltd., each of Bangalore, India.
Support for these partnerships is provided by the U.S. Agency for International Development, the United States Energy Association and the participating utilities.
The objective of the partnerships is to establish long-term cooperative relationships between U.S. and foreign utilities that provide a mechanism for the U.S. energy industry to transfer its experience in market-based energy production, transmission and distribution to its foreign partner countries. The partnerships will involve four to six executive exchange visits per year on key issues identified by the utilities.
Training for Safe Helicopter Line Patrol The Utilities Patrol and Construction Committee of the Helicopter Association International (HAI) is once again offering its course on low-level flight operations for utility pilots and crews. The one-day safety seminar is being held Feb. 14, 1998 in Anaheim, California, U.S., in conjunction with HELI-EXPO 98. The course has been specifically designed by utility professionals for pilots and crews whose missions require them to operate helicopters in wire-infested environments. The course presents unique methods for early detection of wires and avoiding wire strikes.
Course attendees receive a free pass to HELI-EXPO exhibits and displays.
Elec 98 Adding A U.S. Pavilion For the first time, Elec, an international trade show for the European electricity and automation industry, will feature a U.S. Pavilion. Set for Dec. 7-11, 1998 in Paris, France, the show already features generation, transmission, distribution, automation and applications companies from throughout Europe. The addition of the U.S. Pavilion is a response to the growing European Union utility liberalization and the corresponding growing market for power generation and electrical equipment.