psegtexas

PSEG Power, a unit of Public Service Enterprise Group will sell two 1,000 MW gas-fired combined cycle generating units for a combined $687 million, or $343 a kW.

The Odessa facility in west Texas will be sold to High Plains Diversified Energy Corp., municipal utility group based in West Texas. In early January,  Constellation Energy Group Inc. sold the 550 MW natural gas-fired Quail Run power plant in West Texas to High Plains for $185.3 million, or $337 a kilowatt.

PSEG said in a release that MinnTex Power Holdings LLC, an entity managed by Wayzata Investment Partners LLC, has agreed to acquire the equity interests in the limited partnership that owns the Guadalupe facility in south Texas.

PSEG said there is no debt attached to the assets. Cash received from the sale will be used for general corporate purposes.

PSEG Power will account for the Texas assets as discontinued in 2010. Any gain on the sale will also be reported in Discontinued Operations in 2011. Earnings from discontinued operations in 2010 are expected to be $0.01 per share. This figure reflects operating earnings from the Texas assets of $0.03 per share offset by a Mark-to-Market loss of $0.02 per share.

The sales are expected to close during the first half of 2011 and are subject to customary regulatory approvals. Under terms of the definitive sales agreement for the Odessa facility, HPDEC will pursue financing to complete the transaction through the sale of municipal bonds. The sale of the Guadalupe facility to MinnTex is not subject to any financing contingencies.

Goldman Sachs acted as exclusive financial advisor to PSEG Power in connection with the transaction.

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