Eastern Electricity

Last updated

Eastern Electricity plc
Company type Public limited company
Industry Energy
Founded1948
Defunct1995
FateAcquired
Successor Texas Utilities
Headquarters Wherstead Park, England, United Kingdom [1]

Eastern Electricity plc was an electricity supply and distribution utility serving Eastern England, including East Anglia and part of Greater London. It was renamed Eastern Group under which name it was listed on the London Stock Exchange and was a constituent of the FTSE 100 Index until it was acquired by Hanson plc in 1995, before being purchased by Texas Utilities in 1998.

Contents

Eastern Electricity Board

The Eastern Electricity Board (EEB) was formed in 1948 as part of the nationalisation of the electricity industry by the Electricity Act 1947. [2] The board was responsible for the purchase of electricity from the electricity generator (the Central Electricity Generating Board from 1958) and its distribution and sale of electricity to customers. [3]

The key people on the board were: Chairman H. D. B. Wood (1964, 1967), Deputy Chairman C. C. Hill (1964, 1967), full-time member P. Sydney (1964) J. S. Mills (1967). [4]

The total number of customers supplied by the Eastern Electricity Board was: [5] [6]

Eastern Electricity Board customers 1949–89
Year1948/91960/11965/61970/11975/61978/91980/11985/61987/81988/9
No. of customers, 1,000s1,1801,8352,0412,2442,4302,5612,6232,7822,8642,905

The amount of electricity, in GWh, sold by the Eastern Electricity Board over its operational life was: [5] [6]

Eastern Electricity

In 1990, the assets of the board passed to Eastern Electricity plc, one of the regional electricity companies formed by the Electricity Act 1989. The company was privatised later in the year in a stock market flotation, one of many UK Government public share offers that saw formerly state-owned utilities sold off, including British Telecom, British Gas, and the UK's regional water companies. It subsequently became known as Eastern Group, with offices across the east of England including Norwich, [7] Ipswich, [8] Wherstead Park, [9] Rayleigh, [10] [11] Enfield, [12] Bedford [13] and Bury St Edmunds. [14] Its former electrical stores were merged with those from the former Midlands Electricity and Southern Electric boards and called Powerhouse. [15] Eastern purchased 12.5% of National Power. [16]

The Energy Group

The origins of The Energy Group date back to 1990 when Hanson plc acquired Peabody Energy, a US coal business.

In 1995, Hanson plc bought Eastern Group for £2.5 billion. [17] [16] Hanson purchased the remaining shares Eastern did not own in the jointly owned electrical retailer Powerhouse, but sold the business on as a going concern. [18] In 1996, the Energy Group purchased 6000 megawatts of power stations from National Power and Powergen, with the 4000 megawatts from National Power costing $2.5 billion, as part of its bid by the two generating companies to stave off the regulator. [19] [20] [21] [22] Its subsidiary, Eastern Natural Gas, [23] was reported to be making a loss close to £40 million after a big push to grab market share after deregulation. [24] Hanson ownership lasted until 1997, when The Energy Group was demerged from Hanson plc and floated on the London Stock Exchange. [25] The business expanded into telecoms linking up with Esprit Telecom. [26]

In 1997, PacifiCorp, a US energy firm launched a $9.6 billion bid for The Energy Group, [27] which was referred to the Monopolies & Merger Commission. [28] The bid expired before the Monopolies & Merger Commission completed their investigation, and PacifiCorp were joined by Texas Utilities and Nomura Holdings in a takeover battle. [29] Nomura pulled out of the bidding, [30] and due to the hostile nature of the bids, both PacifiCorp and Texas Utilities were told to put in sealed bids. Before the deadline, PacifiCorp withdrew their bid, [31] so Texas Utilities won with a bid of $10 billion. [32] [33] [34] Texas Utilities sold Peabody to Lehman Merchant Banking Partners for $2.3bn as part of the purchase. [31]

TXU Europe

Following the acquisition, Texas Utilities was renamed TXU Corporation, with the Energy Group renamed TXU Europe. Some of the purchase debt was indebted back onto the UK businesses. [35] The group purchased gas fields in the southern North Sea in 1998. [36] The Telecom business announced that it had developed its own equipment to use the companies powerlines for telecommunications in July 1998, with a further 550 km of lines being purchased that October. [26] The business announced in 1999, that the company's turnover in 1998 had grown by 13% to £3.74 billion and profit had risen to £212.6M, a 59% increase. [37] The Telecom business was sold to NTL in January 1999, and purchased further stakes in North Sea gas fields. [26] The retail business was renamed from Eastern Electricity, and its subsidiary Eastern Natural Gas, [38] to Eastern Energy in 1999, with a restructure which saw its retail operations focused on Ipswich, Bedford and Rayleigh. [39] The company purchased BG Group plc's UK Combined Heat & Power plants, and purchased 5% of Hidroelectrica, a Spanish electricity company in 1999, [40] which it grew to just under 20% in 2000. [41] The company announced it was selling its metering business in October 1999. [26] In 2000 TXU Europe purchased the retail business of NORWEB from United Utilities. [42] [43] The combined retail business was renamed TXU Energi in August 2001. [44] [45] In a separate deal with United Utilities, TXU signed a seven-year deal with its customer service provider Vertex, to manage its domestic retail customers. [46] In July 2000, TXU Europe purchased 51% share of German energy business, Stadtwerke Kiel, for $215 million from State Capital Kiel Parliament. [47] A formal cash bid was made to purchase the remaining shares in Hidroelectrica but this was later withdrawn. [48] [49]

The company's distribution rights were originally merged with EDF Energy, owners of London Electricity and South Eastern Electricity Board, two other former regional electricity companies to become 24seven Utility Services in 2000, [50] before being sold to EDF permanently for £560m plus £740m of debt in 2001. [51] [52] The Eastern and London distribution networks were later sold on to UK Power Networks. In a separate deal in November 2001 TXU Europe sold West Burton power stations to London Electricity Group for £366 million. [53] The company's shares in Hidroelectrica were sold in 2001. [54]

TXU Energi was announced in 2001 as the new sponsor of Ipswich Town F.C. [55] In July 2001, TXU sold Rugeley power stations to International Power for £200 million. [56] This was followed by the sale of Peterborough and King’s Lynn Combined Cycle Gas Turbine (CCGT) power stations to Centrica in August. [57] The company's agreed a partnership with Farm Energy, ABB, Powergen, and Royal Dutch Shell to develop the London Array wind farm. [58]

In March 2002, TXU bought the UK retail business of Amerada Hess with plans to integrate into TXU Energi. [59] [60] In April 2002, it was announced that the Russell House office in Ipswich would be demolished and be rebuilt as the company's new headquarters, replacing Wherstead Park, along with other Ipswich sites. [61] In May 2002 TXU Europe won the bidding battle for Braunschweiger Versorgungs AG  [ de ] (BS Energy), a German energy provider from the city of Braunschweig, buying 74.9% for €420 million. [62] TXU Energi was announced as the new sponsor of the Rugby League Challenge Cup in Summer 2002. [63]

In October 2002, TXU announced it was pulling out of Europe to protect the US business, [64] [44] after the European business was affected by a drop in wholesale prices and its credit rating dropping, caused by a large debt created at the purchase by TXU in 1998. [65] [66] Powergen purchased TXU's UK retail businesses for £1.37bn ($2.9bn) later that year, after a takeover battle with SSE plc. [67] [68] Powergen was formally taken over by E.ON in January 2002. [69]

The collapse of the business lead to former shareholders losing £19m, as during the takeover by Texas Utilities they had taken loan notes instead of cash for their shares, which were not secured. [70]

In Media

In 2006, artist Rory Macbeth painted Sir Thomas More’s entire novel Utopia onto an old Eastern Electricity building on Westwick Street in Norwich. [71]

See also

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References

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  34. ↑ Fisher. Daniel (9 August 1999). "Waiting Game". Forbes.
  35. ↑ "ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934". United States Securities and Exchange Commission. 21 March 2001. Archived from the original on 1 November 2021. Retrieved 1 November 2021.
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  44. 1 2 Teather. David (14 October 2002). "TXU abandons British energy market". The Guardian.
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  46. ↑ "TXU acquisition creates UK's biggest power retailer". Oil & Gas Journal. 3 August 2000.
  47. ↑ "WORLD BUSINESS BRIEFING: EUROPE; TXU BUYS UTILITY STAKE". New York Times. 8 July 2000.
  48. ↑ "DCR Press Release on TXU Europe Limited (Eastern Electricity)". Fitch Ratings. 16 June 2000.
  49. ↑ "TXU Withdraws Its Offer To Purchase Hidroelectrica". Wall Street Journal. 28 March 2000.
  50. ↑ Macallister. Terry (15 December 1999). "Fury over further 600 job cuts in utilities". The Guardian.
  51. ↑ "About Us". UK Power Networks. Retrieved 31 October 2021.
  52. ↑ "TXU Europe 2001 Annual Report". SEC. Archived from the original on 1 November 2021. Retrieved 1 November 2021.
  53. ↑ Smith. Rebecca (20 November 2002). "TXU to Sell Power-Distribution Business In England to London Electricity Group". Wall Street Journal.
  54. ↑ "TXU Europe agrees to sell interest in Hidroelectrica del Cantabrico". Power Engineering International. 25 January 2001.
  55. ↑ "TXU Energi New Sponsor". TWTD. 2 May 2001.
  56. ↑ Morgan, Oliver (2 June 2001). "International Power in £250m deal with TXU". The Observer.
  57. ↑ DEE SCHWANHAUSSER (24 August 2001). "TXU leases 705 MW of gas-fired plant to Centrica". Power Grid International.
  58. ↑ "Top Plant: London Array Offshore Wind Farm, Outer Thames Estuary, UK". PowerMag. 1 December 2014.
  59. ↑ "TXU buys Amerada Hess' U.K. retail business". Dallas Business Journal. 1 March 2002.
  60. ↑ Harrison. Michael (2 March 2002). "TXU pays £117m for Amerada unit". The Independent.
  61. ↑ Abbott.Lynn (9 April 2002). "Ipswich Village on Schedule". Ipswich Star.
  62. ↑ "TXU buys Braunschweiger Versorgungs-AG". Energie Chronik. No. 20506. 2 May 2002.
  63. ↑ "Rugby League appoints Camelot executive as marketing director". Marketing Week. 12 December 2002.
  64. ↑ US firm pulls plug in power crisis BBC News, 14 October 2002
  65. ↑ Stewart Hamilton, Ivan Moss (17 October 2003). Rise and Fall of TXU Europe ref.IMD-3-1274. Institute for Management Development.
  66. ↑ John Bower (September 2002). Why Did Electricity Prices Fall in England and Wales? Market Mechanism or Market Structure? EL 02. Oxford Institute for Energy Studies.
  67. ↑ Powergen buys TXU's British arm BBC News, 21 October 2002
  68. ↑ "SSE battles it out with Powergen over TXU". The Herald. 21 October 2002.
  69. ↑ Kapner, Suzanne (10 April 2001). "World Business Briefing: Europe; E.on to Buy Powergen". The New York Times.
  70. ↑ Harrison. Michael (17 February 2003). "Hanson shareholders lose £19m on TXU Europe". The Independent.
  71. ↑ "Geograph:: Writing on the wall, Westwick Street,... © Stephen Richards cc-by-sa/2.0".
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