FirstEnergy lowers power assets sale to $825mn
Houston, 7 September (Argus) — Ohio-based power company FirstEnergy will sell 1,615MW of its natural gas and hydroelectric assets to LS Power Equity Partners III for a revised price of $825mn.
FirstEnergy first announced in January that it would sell four natural gas-fired power plants in Pennsylvania and a portion of its ownership interest in a hydroelectric power station in Virginia to the New York-based private equity firm for $925mn.
During the company's second quarter earnings call in July, FirstEnergy executives noted that the terms of the agreement had continued to evolve, and that the parties were exploring "alternative structures" in terms of pricing and closing.
In addition to a lower price tag, the revised agreement also includes the sale of FirstEnergy's interest in the natural gas-fired Buchanan Generating Facility in Virginia.
The assets in the sale are either owned directly or indirectly by FirstEnergy subsidiaries Allegheny Energy Supply Company, LLC and Allegheny Generating Company.
FirstEnergy has previously said that it intends to move away from competitive generation, with the aim of operating as a fully-regulated utility company.
The transaction involving the Springdale, Chambersburg, Gans and Hunlock natural gas-fired power stations in Pennsylvania is expected to close in the fourth quarter of 2017.
The sale of the interests in the Bath County Hydro Station and the Buchanan Generating Facility in Virginia is expected to close in the first quarter of 2018.