NextEra Energy Resources LLC, a unit of NextEra Energy Inc. (NYSE: NEE), said one of its subsidiaries will sell its ownership interest in a portfolio of natural gas-fired generating assets to an affiliate of LS Power for $1.05 billion, subject to working capital and other adjustments.
The transaction includes the 507 MW Blythe Energy Center, a natural gas-fired facility in Blythe, Calif.; the 668 MW Calhoun Energy Center, a natural gas-fired facility located in Eastaboga, Ala.; the 98 MW Cherokee Energy Center, a natural gas-fired facility in Gaffney, S.C.; and the 879 MW Doswell Energy Center, a natural gas-fired facility in Ashland, Va. The portfolio purchase price is around $467/kW.
The assets had a limited strategic fit in NextEra's portfolio, said Mitch Davidson, president and CEO.
A NextEra Energy Resources' affiliate will continue to operate three of the facilities for an initial period of five years. The fourth facility will be operated by the unit for an initial two-year period under service contracts. The transaction is expected to close in the fourth quarter of 2011, pending receipt of necessary regulatory approvals and third-party consents.
The transaction is expected to result in net cash proceeds of approximately $500 million after the repayment of debt and transaction costs and a taxable gain, which is expected to be largely offset by deferred tax assets. The transaction will also result in a one-time after-tax charge of approximately $97 million, which the company expects to exclude from adjusted earnings.
Following the closing of the sale, NextEra Energy Resources will own and operate assets in 23 states and Canada with a combined capacity of more than 16,880 MW.
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