FirstEnergy Corp. has announced it has entered into an agreement to sell four competitive natural gas generating plants in Pennsylvania and its competitive portion of a Virginia hydroelectric power station to a subsidiary of LS Power Equity Partners III, LP, of New York.
Under the terms of the agreement, the facilities would be purchased for approximately US$925 million in an all cash transaction. The transaction is expected to close in the third quarter of 2017, subject to customary and other closing conditions, including approval by the Federal Energy Regulatory Commission (FERC) and other agencies, as well as third-party consents.
The power stations included in the sale are owned directly or indirectly by FirstEnergy subsidiaries Allegheny Energy Supply Company, LLC, and Allegheny Generating Company and have a total capacity of 1,572 MW. The 23 current employees at these power stations will be offered employment with the new owner. The transaction includes:
In November 2016, FirstEnergy announced it was moving away from competitive generation markets and was exploring a variety of options, including seeking to move some of its competitive assets to more regulated or regulated-like constructs, or selling or deactivating additional units. The sale of these plants is consistent with FirstEnergy's strategy of operating as a fully regulated utility company.
Upon completion of the sale, FirstEnergy will own or control a total generating capacity of approximately 15,380 MW from nuclear, coal, hydro, wind and solar facilities across Ohio, Pennsylvania, West Virginia, New Jersey, Virginia and Illinois.