Charlotte-based Duke Energy said Monday that it plans to sell its ownership stakes in 13 coal, oil and natural gas power plants in the Midwest.
The plants haven’t delivered the financial performance Duke expected, CEO Lynn Good said.
“Our merchant power plants have delivered volatile returns in the challenging competitive market in the Midwest,” said Good, in a statement. “This earnings profile is not a strategic fit for Duke Energy and we have begun a process to exit the business.”
Duke said it expects the sale will take between 12 and 18 months. The company expects to take a pretax impairment charge of $1 billion to $2 billion in the first quarter as a result of the sale.
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Most of the power plants Duke is looking to sell are in Ohio, with one in Pennsylvania and one in Illinois.
They have a total capacity of 6,600 megawatts, Duke said, and approximately 600 employees and contractors staff the plants.
Duke sells the power from those plants on the wholesale electricity market. The company owns six of the plants completely and has an ownership stake in the other seven.
“These power plants are competitive in the market, equipped with significant environmental controls, and efficiently staffed,” said Marc Manly, president of Duke’s Commercial Businesses unit.
Good said the sale won’t affect Duke’s regulated power generation business in the Midwest.
“We remain fully committed to our Duke Energy Ohio and Kentucky regulated utilities and the 1.3 million customers we serve in those states. These utilities are not a part of this strategic process,” Good said.
Citigroup and Morgan Stanley have been chosen to advise Duke on the sale.