Bloomberg News

Reliant's New York Plant Sale May Be Slowed by Union

May 06, 2004

Reliant Resources Inc.'s plan to sell three power plants in New York City may stall because of failure to renew a labor contract with 177 union workers, the union said.

A June 24 deadline to renegotiate the expiring four-year contract was moved up to May 8 with the union's consent to coincide with the bidding deadline, said Manny Hellen, president of Local 1-2 Utility Workers Union of America, in an interview.

``The new owner is going to want labor peace,'' he said. ``When we made a counter-offer, they said, `No, this is it.' I guess they never dealt with a New York City union before.'' Houston-based Reliant owns power plants in 12 U.S. states.

The union is open to continued talks, he said. Unresolved issues include wages, benefits and job security, said Hellen, who declined to be more specific.

``We're open to continued negotiations, and in fact dates for future negotiations have already been set,'' Reliant spokeswoman Pat Hammond said. ``We're optimistic we'll reach an agreement.''

She declined to comment on the effect of the negotiations on plant sales. ``We can't comment on market rumors regarding sales or acquisitions,'' Hammond said.

Reliant is selling the 1,300-megawatt Astoria Generating Station in the borough of Queens and the 600-megawatt Gowanus and 230-megawatt Narrows plants in Brooklyn.

The three New York City plants can generate about 2,000 megawatts, or 23 percent of the city's power. The sale would also include smaller hydroelectric plants elsewhere in New York State.

``We've had four owners for these plants in the last five years,'' including Consolidated Edison Inc. (ED:US), Constellation Energy Group Inc., Orion Power Holdings and Reliant, Hellen said.

To contact the reporter on this story: Richard Schwartz in New York at rschwartz11@Bloomberg.net.

To contact the editor responsible for this story: Robert Dieterich at rdieterich@bloomberg.net.


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