The UK gas company Centrica has purchased two UK power plants for $250 million. The two plants, both in East Anglia, have a combined generating capacity of 705MW.
Under the deal Centrica will acquire operating leases with about 20 years to run on the two plants from the US utility TXU Corp. The transaction is expected to be completed by September, subject to regulator approval from the Office of Fair Trading.
The move shows Centrica strengthening its electricity generation business while TXU Corp is reducing its UK capacity in a bid to improve its balance sheet. In June TXU sold the 1000 MW Rugeley coal-fired power plant near Birmingham to International Power for $289 million.
Centrica currently serves 4.5 million electricity customers in addition to is gas customers. The company acquired a 60 per cent stake in the UK utility Humber Power Ltd in May 2001, gaining access to a 1260 MW power plant in northern England. The company said that its new acquisitions will allow it to supply 30 per cent of its customer base from its own generating capacity.
The two plants acquired by Centrica in the latest deal are at Peterborough and King’s Lynn. Both are combined cycle generating stations. Under the terms of the takeover, Centrica will assume responsibility for TXU’s entire economic interest in the plants and will manage all the operations and maintenance as well as fuel purchase and power trading.