If the transaction gains approval from state and federal regulators, APS will close the plant’s older, less efficient Units 1, 2 and 3, and install additional emission controls on the remaining units.

APS said it will pay $294m for the Southern California Edison share, which is substantially less than other generation alternatives.

APS, the plant operator, owns 100% of Units 1, 2 and 3, which are subject to environmental upgrades under rules proposed by the US Environmental Protection Agency in October.

As a result of the anticipated shutdown of Units 1, 2 and 3, capacity at the coal-fired station will be reduced by 560MW from 2,100MW to 1,540MW (of which APS will own 970MW).