Chicago, August 9, 2012 — Exelon reached an agreement to sell its three Maryland coal-fired power plants to Raven Power Holdings, a new portfolio company of Riverstone Holdings, fulfilling its commitment to divest the plants as part of its merger with Constellation.
Under the agreement, Raven Power will maintain jobs with comparable pay and benefits for employees at the plants.
The three plants, known collectively as Maryland Clean Coal, include:
Brandon Shores, Pasadena, Md.: 1,273 MW of installed capacity, two units (coal)
C.P. Crane, Middle River, Md.: 399 MW installed capacity, three units (coal and oil)
H.A. Wagner, Pasadena, Md.: 976 MW installed capacity, five units (coal, natural gas and oil)
Raven Power will pay about $400 million for the plants and related assets, subject to several closing adjustments. In addition, the sale will generate about $205 million in cash tax benefits, with the majority of that amount realized in 2012 and 2013.
Exelon will record a pre-tax loss estimated to be about $275 million in the third quarter to reflect the difference between the estimated sale price and the carrying value of the plants. Exelon will determine the optimal use of the sale proceeds through its normal planning process.
The sale was required by the Federal Energy Regulatory Commission (FERC), U.S. Department of Justice (DOJ) and the Maryland Public Service Commission as part of Exelon’s merger agreement. The transaction, which is subject to approval by FERC and DOJ, is expected to close in the fourth quarter of 2012.
Since 2008, the three coal plants have undergone environmental upgrades, including investment in a new scrubber at Brandon Shores. The plants comply with the Maryland Healthy Air Act and are positioned to meet pending Environmental Protection Agency (EPA) emissions standards.
Citi and Goldman Sachs & Co. acted as financial advisors to Exelon, and Morgan, Lewis & Bockius served as legal counsel. Vinson & Elkins served as legal counsel to Riverstone.