FirstEnergy has entered into a revised agreement with a subsidiary of LS Power Equity Partners III to sell 1,615MW natural gas and hydroelectric generation assets for $825m.

The power plants are located in Pennsylvania and Virginia.

The original agreement, which was signed by the firms in January this year, included the sale of 1,572MW of assets for $925m.

Under the revised agreement, the sale involves six power stations, which are owned directly or indirectly by FirstEnergy subsidiaries Allegheny Energy Supply Company and Allegheny Generating Company.

The sale is part of FirstEnergy's strategy to exit from commodity-exposed generation.

The assets considered for the sale include 638MW Springdale Generating Facility (Units 1-5) in Springdale Township, 88MW Chambersburg Generating Facility (Units 12-13) in Guildford Township, 88MW Gans Generating Facility (Units 8-9) in Springhill Township and 45MW Hunlock Creek in Hunlock Creek.

In addition, the deal includes sale of a portion of Allegheny Generating Company's ownership stake in the 713MW Bath County Hydro station.

The transaction will also see Allegheny Energy Supply divesting its indirect stake in a joint venture that owns the 48MW Buchanan Generating Facility, which was not included in the original purchase agreement.

While the sale of the Springdale, Chambersburg, Gans and Hunlock power stations is expected to close in the fourth quarter of 2017, while the transaction involving the sale of stakes in Bath and Buchanan is expected to be completed in the first quarter of 2018. 

After the completion of the transaction, FirstEnergy will own nearly 15,380MW of generation capacity from nuclear, coal, hydro, wind and solar facilities located across Ohio, Pennsylvania, West Virginia, New Jersey, Virginia and Illinois.

The transactions are subject to various customary and other closing conditions, including receipt of regulatory approvals and third-party consents.

FirstEnergy expects to utilize the proceeds from the sales to invest in its unregulated money pool.

It may also use them for the repayment of debt and other corporate purposes.

Image: FirstEnergy headquarters in downtown Akron, Ohio, US. Photo: courtesy of DangApricot/Wikipedia.