The US Federal Energy Regulatory Commission (FERC) approved a plan by Illinova to transfer its fleet of fossil-fuel fired generating plants from a utility subsidiary into a separate but affiliated unregulated company.

The FERC order allows Illinova to transfer 3800 MWe of generating capacity from Illinois Power to the new subsidiary. FERC also approved a power purchase agreement between Illinois Power and the new subsidiary.

The plants affected by the FERC approval are five coal-fired power stations (Baldwin, Hennepin, Wood River, Havana and Vermilion) and natural-gas fired plants at three sites (Tilton, Oglesby and Stallings).

These plants will continue to supply power to Illinois Power customers until 2004, with options for annual renewal after that date. From this month (October) some utility customers will able to choose their electricity suppliers, the first stage of electricity deregulation in the state.