Exelon buys combined-cycle power plant

Exelon Corp. will buy the 720 MW Wolf Hollow combined-cycle natural gas-fired power plant in Texas from Sequent Wolf Hollow LLC for $305 million, or $423 a kilowatt, adjusted for working capital. The deal is subject to approval from the Public Utility Commission of Texas.

Wolf Hollow began operating in August 2003 and is equipped with two Mitsubishi combined-cycle gas turbines.

Exelon Generation’s existing natural gas-fired plants at Handley, Mountain Creek and ExTex LaPorte have a total capacity of 2,222 MW and also are within the Electric Reliability Council of Texas grid.

The transaction eliminates a power purchase agreement Exelon had with Wolf Hollow to purchase 350 MW of the plant’s output through 2023.

Exelon plans to finance the deal with existing cash flow and liquidity resources and expects to close in the third quarter of 2011. Barclays Capital acted as financial advisor to Exelon.

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