Allentown, Pa., Feb. 27, 2012 — PPL Generation agreed to buy AES Ironwood and AES Prescott, which together own and operate the 705-MW AES Ironwood combined-cycle natural gas-fired power plant in Lebanon, Pa., from a unit of the AES Corp.
Total consideration for the transaction is about $304 million, consisting of a cash purchase price of $87 million, which includes $4.8 million in expected working capital, and about $217 million of net project indebtedness of AES Ironwood.
The plant began operation in 2001, and for the past four years PPL EnergyPlus, LLC, the marketing and trading unit of PPL, has supplied natural gas for the operation of the plant in return for securing its full output under a tolling agreement that expires in 2021.
The sale is expected to close in the second quarter of 2012 following the receipt of necessary regulatory approvals and third-party consents. The acquisition is not expected to have a material impact on PPL's earnings or financing plans.