Epcor Power and Epcor Power Equity have signed a definitive agreement to acquire 100% equity interest in Morris Cogeneration from Diamond Generating and MIC Nebraska, both wholly-owned subsidiaries of Mitsubishi. The acquisition price is $77 million, subject to closing adjustments.

The transaction is expected to close in the fourth quarter of 2008, subject to certain closing conditions. The Morris facility is a 177MW natural gas-fired cogeneration facility located on Equistar Chemicals’s chemical plant in Morris, Illinois, near Chicago.

All of the steam and a portion of the electricity produced from the facility are sold to Equistar under the terms of a long-term energy services agreement which expires in 2023.

Equistar, a wholly owned subsidiary of Lyondell Chemical, produces ethylene, and its co-products and derivatives including polyethylene plastic, at the Morris facility.

Brian Vaasjo, president of the general partner of Epcor Power, said: The acquisition of the Morris facility is an excellent strategic fit and is expected to be modestly accretive to cash flow. This facility combines the off-gas normally generated by the Equistar production process with natural gas, and efficiently combusts the mixture to simultaneously cogenerate steam and electricity, very similar to other Epcor operated facilities.