PSEG Power to sell Texas gas fired generation assets
The assets consist of two 1,000 MW gas-fired combined cycle generating units that will be sold in two separate transactions
Newark, N.J., January 13, 2011 — PSEG Power, a unit of Public Service Enterprise Group, agreed to the sale of its Texas generating assets.
The assets consist of two 1,000 MW gas-firedcombined cycle generating units that will be sold in two separate transactions. The Odessa facility in west Texas will be sold, pursuant to an asset purchase agreement, to High Plains Diversified Energy Corp., a municipal utility group based in West Texas.
MinnTex Power Holdings, an entity managed by Wayzata Investment Partners LLC, has agreed to acquire 100 percent of the equity interests in the limited partnership that owns the Guadalupe facility in south Texas.
The transactions have a combined equity value of $687 million, or $343 per Kw. There is no debt attached to the assets. Cash received from the sale will be used for general corporate purposes.
"These units are efficient, well-run assets, and there was substantial interest," said Caroline Dorsa, Executive Vice President and Chief Financial Officer of PSEG.
PSEG Power will account for the Texas assets as discontinued in 2010. Any gain on the sale will also be reported in Discontinued Operations in 2011. The Texas assets generated 7.3 TWh in 2010.
Earnings from discontinued operations in 2010 are expected to be $0.01 per share. This figure reflects operating earnings from the Texas assets of $0.03 per share offset by a Mark-to-Market loss of $0.02 per share.