Oglethorpe Power Corp. plans to acquire 1,220 MW of power generating capacity in Georgia from an affiliate of KGen Power Corp. for $531 million, or $435 a kW. The price excludes working capital and other closing adjustments.
Oglethorpe Power will cancel a 605 MW combined cycle plant currently under development if the Murray Units I and II purchase is completed. The corporation had not announced a final location for that facility, but had been considering property it already owns in Monroe County, Ga., among other options.
Oglethorpe Power announced in October 2010 that it had entered a non-binding agreement to purchase existing gas-fired facilities but did not identify the seller or location for reasons of confidentiality. Since that time, the corporation has completed its due diligence, and its Board and member systems have approved the transaction.
The acquisition is still subject to applicable regulatory approvals, the approval of KGen Power stockholders and other customary closing conditions. If the transaction is completed, closing is expected in April.
Oglethorpe Power also deferred development of a previously announced 100 MW biomass plant in Warren County, Ga. It said it continues to monitor regulatory and legislative developments related to biomass electricity generation.
Oglethorpe Power engaged Sutherland as legal counsel for the transaction and is not utilizing a financial adviser.
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