A unit of Progress Energy Inc. said it will buy two power plants totaling 1182 MW in Georgia from LG&E Energy Corp., a unit of the UK’s Powergen PLC, for $345m.
Germany’s E. On AG is in the process of buying Powergen in a deal expected to be completed in the spring.
The projects include the Monroe plant in Monroe, Ga., a 496 MW natural gas-fired plant placed in service in June 2001, and the 686 MW Tiger Creek project in Washington County, Ga. The Monroe plant has been operating since June and the Tiger Creek project is scheduled to begin operating by June 2003.
Tom Kilgore, president of Raleigh, NC,-based Progress Ventures, said the company’s existing generation adjacent to the Monroe facility and expansion plans under way in Effingham County, Ga., provide synergy opportunities and a greater ability to create value from the plants.
The transaction also includes a power purchase agreement with LG&E Marketing for both projects through Dec. 31, 2004. In addition, Progress said the deal includes a project management completion agreement with LG&E under which Progress Ventures has assumed certain liabilities to complete construction of the Tiger Creek project.
The transaction is subject to approval by the Federal Energy Regulatory Commission and other regulatory agencies and is expected to be completed by early 2002. Progress Ventures Inc. participates in the wholesale energy business through fuel extraction, manufacturing, and delivery; merchant generation; and energy marketing and trading.
Powergen earlier reported third quarter profits fell on lower wholesale electricity prices in the UK and lower demand and prices in the US Midwest. E.ON’s acquisition is subject to US regulatory clearances since the deal includes LG&E Energy Corp.