FirstEnergy revises deal to sell 1.6GW of natural gas and hydro assets in US
US-based FirstEnergy has signed a revised agreement to sell 1.6GW of natural gas and hydroelectric power generation assets in Pennsylvania and Virginia to a subsidiary of LS Power Equity Partners III.
The previous deal was signed in January this year. It featured the sale of 1.5GW of natural gas and hydroelectric assets for $925m. The new deal will see the assets sold for $825m in cash.
The revised agreement includes six power stations, which are directly or indirectly owned by FirstEnergy subsidiaries Allegheny Energy Supply Company and Allegheny Generating Company. The 20 employees currently working at these plants will be hired by the new owner.
Other assets included are FirstEnergy’s 638MW Springdale generating facility units one to five, the 88MW Chambersburg generating facility units 12 to 13, the 88MW Gans Generating facility units eight to nine, and the 45MW Hunlock Creek facility, which are all powered by natural gas and located in Pennsylvania, US.
Transactions of the Springdale, Chambersburg, Gans, and Hunlock power stations are scheduled to complete by Q4, 2017.
The revised deal also includes a portion of Allegheny Generating Company's ownership interest in the 713MW Bath County Hydro project in Virginia, US. This sale of interests is expected to close by Q1, 2018.
Allegheny Energy Supply’s indirect interest in a joint venture that owns the 43MW gas-powered Buchanan generating facility in Virginia is also included in the deal. This facility was not in the original agreement.
Following the completion of the deal, which is subject to several customary and closing conditions, FirstEnergy will own or control generating capacity totalling around 15GW from nuclear, coal, gas, hydro, wind, and solar facilities across Ohio, Pennsylvania, West Virginia, New Jersey, Virginia, and Illinois in the US.
FirstEnergy seeks to use proceeds from the sales to invest in its unregulated money pool and in the repayment of debt and other corporate purposes.
Image: A power plant. Photo: courtesy of kishjar?/Flickr.