FirstEnergy Generation (FG) has agreed to sell its 545MW West Lorain Facility and related assets to Starwood Energy Group Global affiliate company Vermillion Power for $144m in cash and customary closing adjustments.
Located on 500 acres in Lorain, Ohio, near Lake Erie, the West Lorain Facility is a periodic-start, combustion-turbine generation station that was constructed in 1973.
Initially, West Lorain Facility featured a combined-cycle electric generating system with two combustion turbines (Units 1A and 1B), two heat recovery steam generators, and a steam turbine generator.
The company added five additional combustion turbines (Units 2–6) in 2001. Currently, the plant runs on oil and can also operate on natural gas.
On 31 March, FirstEnergy Solutions with subsidiaries and FirstEnergy Nuclear Operating Company filed petitions under Chapter 11 of the Federal Bankruptcy Code to facilitate an orderly financial restructuring.
Under a motion filed by FG with the Bankruptcy Court overseeing its chapter 11 cases for approval of auction and bid procedures, other interested parties will be permitted to submit competitive bids for the West Lorain Facility and related assets.
The power plant sale will be completed in accordance with a court-supervised bankruptcy auction process.
If FG does not receive higher or better bids, then Starwood will buy the business, subject to the satisfaction of customary conditions to closing.
Subject to customary approvals from Federal Energy Regulatory Commission (FERC) and Hart-Scott-Rodino, the sale is expected to close the transaction in the first half of next year.