Duke Energy sells Midwestern power plants for $2.8 billion
08/22/2014 8:26 AM
08/22/2014 8:27 AM
Duke Energy will sell 11 commercial power plants in the Midwest to Dynegy for $2.8 billion in cash, the company said Friday.
The sale is one of two that Houston-based Dynegy announced. It also will buy plants in the Northeast and Midwest from Energy Capital Partners for $3.45 billion.
The Duke sale is expected to close by early 2015. Duke’s regulated utilities in Ohio and Kentucky aren’t part of the sale.
Duke said in February that it would sell the Midwest plants, which have been buffeted by competitive markets that made profits volatile. That announcement followed Ohio’s denial of a new pricing mechanism.
Duke also has begun a strategic review of its international business, due by year’s end, that could potentially lead to its sale. The unit owns power plants in Central and South America.
The Midwest sale will offset by $500 million the $1.4 billion charge, reflecting the fleet’s expected value, that Duke recorded in first-quarter earnings in anticipation of the sale.
The sale must get approval from the Federal Energy Regulatory Commission and the expiration of a waiting period under federal law.
The plants, fueled by coal, natural gas and oil, have a combined capacity of 6,100 megawatts, sending their electricity onto the PJM wholesale power market, which operates in 13 states and the District of Columbia.
Duke Energy Ohio wholly owns six of the merchant plants and shares ownership in five plants with Dayton Power & Light and American Electric Power. Nine plants are in Ohio, one in Illinois and one in Pennsylvania.
The Beckjord plant near Cincinnati, which Duke will retire by January, was not included in the sale.
More than 500 commercial generation and corporate employees will interview for jobs with Dynegy, which will assume collective bargaining agreements for unionized workers.
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