Company of the Week

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The Independent Online
In a week when four out of every five shares in the FT-SE 100 fell, one of the few sectors holding up and still recommended for purchases is the utilities. News that National Power plans to invest $1.6bn (pounds 940m) in gas-fired power stations in the US over the next three years, bringing its first plant online by 2000, helped the shares hold their own.

Zurich-based Asea Brown Boveri will build the first power station, a 1,100-megawatt combined-cycle gas turbine plant at Midlothian, Texas. The estimated cost is at least $350m. National Power said it will invest in a total of more than 3,000 megawatts of capacity in Texas, New England and other parts of the US

The company is investing heavily overseas, as it faces losing market share in the UK. It has been under pressure to sell some of its UK plants to make power generation more competitive.

"This keeps the overseas investment flow going and should be reasonably positively greeted," said Angelos Anastasiou, an analyst at Credit Lyonnais Securities. National Power shares rose 2 per cent on the week to 559p in a falling market.

The US investment raises National Power's total overseas power plants to more than 12,000 megawatts, compared with 16,000 in the UK. In the year ended 31 March, National Power's overseas investments contributed pounds 130m to total pretax profit of pounds 731m.

"Texas is one of the best electricity markets in the US, with over 50,000 megawatts of capacity - almost as much as the whole of Britain," said Keith Henry, National Power's chief executive.

The company said it was taking advantage of the moves towards deregulation in the US electricity market and opportunities to build new-low cost plant.

National Power is also considering bidding for London Electricity, a unit of the Entergy Corp, which the US company has put up for sale.

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