Dominion selling three Massachusetts power plants
The sale is expected to close in the second quarter of 2013
Dominion (NYSE:D) signed a purchase and sale agreement for three merchant generation power plants with a subsidiary of funds controlled by Energy Capital Partners, a private equity firm with offices in Short Hills, N.J., and San Diego, Calif. The sale is expected to close in the second quarter of 2013.
The power stations are:
· Kincaid Power Station, a 1,158 MW power station in Kincaid, Ill., with two 579 MW coal-fired units. Dominion has owned Kincaid since 1998.
· Elwood Power Station, a 1,424 MW power station outside Chicago, with nine natural gas-fired combustion turbines. Dominion has owned a 50 percent interest (712 MW) in and operated the station since Elwood became operational in 1999.
The sale will require the approval of the Federal Energy Regulatory Commission (FERC) and Hart-Scott-Rodino antitrust clearance.
Dominion announced last September that it was exiting the merchant coal-fired generation business as part of the company's continual review of its assets to ensure they fit strategically and support its objectives to improve return on invested capital and shareholder value.
The sale is expected to result in after-tax proceeds of about $650 million, which includes cash tax benefits generated from the sale. The company plans to invest the proceeds in the company's regulated businesses and reduce debt needs.
Dominion is one of the nation's largest producers and transporters of energy, with a portfolio of about 27,500 MW of generation, 11,000 miles of natural gas transmission, gathering and storage pipeline and 6,300 miles of electric transmission lines. Dominion operates one of the nation's largest natural gas storage systems with 947 billion cubic feet of storage capacity and serves retail energy customers in 15 states.