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E.on has put Allegheny Energy on its U.S. shopping list and would like to acquire the Hagerstown, Md.-based utility and generation outfit following its planned purchase of two Ohio energy concerns, Cinergy and DPL, according to an official familiar with E.on's strategy. E.on hopes to announce the Ohio acquisitions during its annual road show in July (see story, page 2). The official adds E.on has yet to enter acquisition discussions with Allegheny.

KeySpan is looking at financing its Long Island and New York City plant expansion via tax-exempt bonds, its preferred option versus tapping the non-recourse market. Mike Taunton, treasurer, says the company is currently waiting for the Internal Revenue Service to rule on its application for tax exemption on the financing. He declined to speculate on the likely outcome, but notes KeySpan is expecting to receive a ruling by the end of the summer. The company has also been assessing the project finance market (PFR, 11/22), but Taunton says little progress has been made down that route because of the preference for a tax-exempt issue.

Atlanta-based Mirant is looking at a June or July launch for a non-recourse bank facility funding the construction of two U.S. combined-cycle gas-turbine power plants. The loan will likely be for $300-310 million and cover the construction of the 300 MW Mint Farm project in Longview, Wash. and the 550 MW Sugar Creek project at Terre Haute, Ind., says one banker. The plants will be run on a merchant basis, he adds. Officials at Bank Of America, which was retained recently to arrange the project financing (PFR, 4/15), declined to comment.

Mirant has increased its equity strike in the $336.5 million Perryville project, despite recently announcing plans to sell its stake in the greenfield development to co-sponor Cleco.

Wilmington, Del.-based Conectiv is preparing to tap the non-recourse loan market to finance the construction of a $600 million gas-fired combined-cycle power plant in Bethlehem, Pa. Sole bookrunner Credit Suisse First Boston and fellow co-lead Bank of Nova Scotia on May 22 will launch a $365 million, four-year facility backing the development. Tim Brown, a Conectiv spokesman, did not return calls.

German energy giant E.on is hoping to announce its double acquisitions of Ohio energy concerns Cinergy and DPL during a U.S. investor road show that is planning to make this July, says an official close to the negotiations. An E.on investor relations official in Dusseldorf declined to comment beyond saying that details of the road show have yet to be determined.

Power companies in the U.K. and Europe increasingly are looking at the asset-backed market with an eye to raising cash by securitizing customer revenues or other esoteric receivables such as stranded costs and nuclear decommissioning costs, according to London-based bankers and analysts. "Securitization is on the agenda for most power companies," notes one ABS banker. Greg Taylor, analyst at Moody's Investors Services, says the rating agency has been approached by power companies across Europe seeking to execute future-flow and whole-business backed securitizations. He declined to reveal the companies that are pursuing this funding avenue.

Refco Group, a New York-based diversified financial services company and commodity broker, is looking to set up a gas and power trading operation in London and has hired two El Paso Europe traders to kick-start the operation. Jamie Spence, a gas trader, joined Refco in London last month.

Dynegy is in talks to sell stakes in two of its largest U.S. and European assets in a move that could raise up to $1 billion. Michael Flinn, president of Dynegy's European division, said the group was in advanced talks to sell up to 50% of Northern Natural Gas Pipeline in the U.S., which it acquired in November in return for a $1.5 billion cash injection in Enron. He added that it was discussing the sale of its onshore gas storage assets in the U.K. and a minority stake in its offshore gas storage operations, both of which were bought from BG Group last summer for a total of GBP421 million ($618 million) (Financial Times, 5/8).

Tenaska's 846-MW combined-cycle project power plant near Billingsley, northwest of Montgomery, Ala., commenced operations as scheduled May 1. The natural gas-fired plant was developed under a joint partnership with Diamond Generating, and a unit of Williams will supply natural gas and market the power produced (Dow Jones, 5/7).