Duke Energy has announced the sale of Duke Energy North America (DENA) generation assets to LS Power in a $1.54 billion deal.
LS Power is to purchase entire DENA fleet outside the Midwest, including some 6,200 MW of power generation, located in the western and northeast US.
Based on a minimum purchase price of $1.48 billion, Duke Energy anticipates a one-time, pre-tax gain on the sale of approximately $330 million.
The transaction is subject to Federal Energy Regulatory Commission and Hart-Scott-Rodino approvals and is expected to close before June 2006.
The assets to be sold to LS Power include the Arlington Valley 570 MW plant and the Griffith Energy Facility at 300 MW, reflecting Duke Energy’s 50% ownership, both natural gas-fired, combined-cycle facilities in Arizona. The South Bay 700 MW (10 year lease); Morro Bay 1,002 MW both of which are conventional steam facilities; Moss Landing 2,538 MW conventional steam and natural gas-fired, combined-cycle facility and Oakland Power Plant 165 MW, simple-cycle, fuel-oil facility all of which are in California. In addiotn, Maine Independence 520 MW, combined-cycle facility in Maine and Bridgeport Energy 326 MW, reflecting Duke Energy’s 67% ownership, a combined-cycle facility in Connecticut are also included.
The move follows the November announcement that Duke would transfer substantially all of DENA’s commercial portfolio of derivatives contracts to Barclays Capital.
Proceeds from two transactions are expected to yield net cash to Duke Energy in excess of $500 million.