Entergy to buy 450MW, 620MW CCGT power plants for a total of $459MM

Source: Entergy Corporation

Entergy Corporation’s subsidiary, Entergy Mississippi, Inc., has signed an asset purchase agreement to acquire the Hinds Energy Facility; a 450-megawatts (MW) natural gas-fired combined-cycle plant located in Jackson, Miss., from KGen Hinds, LLC, a subsidiary of KGen Power Corporation. The purchase price is approximately $206 million (or $458/kW).

Entergy Corporation’s subsidiary, Entergy Arkansas, Inc., has also signed an asset purchase agreement to acquire the Hot Spring Energy Facility, a 620 MW natural gas-fired combined-cycle plant located in Hot Spring County, Ark., from KGen Hot Spring LLC, a subsidiary of KGen Power Corporation. The purchase price is approximately $253 million (or $408/kW).

Entergy Mississippi and Entergy Arkansas also expect to invest in various plant upgrades at the facilities after closing. The transactions result from a Request for Proposals that was issued in September 2009 by Entergy Services, Inc. and sought incremental long-term generation resources for the Entergy Operating Companies.

The purchases are contingent upon, among other things, obtaining necessary approvals, including full cost recovery, from various federal and state regulatory and permitting agencies. These include regulatory approvals from the Mississippi Public Service Commission, the Arkansas Public Service Commission and the Federal Energy Regulatory Commission, as well as clearance under the Hart-Scott-Rodino anti-trust law. Because Hinds and Hot Spring represent a substantial portion of KGen Power’s remaining assets, Delaware law requires KGen Power to obtain shareholder approval prior to selling these facilities. KGen Power intends to mail a proxy statement to its stockholders



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