PacifiCorp, Entergy buy Australian utilities
PacifiCorp has announced an agreement to purchase Powercor, an electric utility in Southeast Australia, for approximately (US)$1.6 billion. Powercor has had the highest load growth of the five electric distribution companies in the State of Victoria. Fred Buckman, PacifiCorp president and CEO, said the stability of the Austrialian government figured prominently in the company`s decision to pursue an acquisition during the country`s privatization.
“The Powercor acquisition provides an excellent platform for PacifiCorp to explore other opportunities in Australia and elsewhere in Southeast Asia,” he said. With privatization, a fully competitive wholesale power market is expected to develop in Victoria. PacifiCorp`s expertise in power marketing and aggregation and in the selling of unbundled power services will be transferred to Powercor.
The transaction will be initially financed with borrowing in the United States by PacifiCorp Holdings and in Australia by PacifiCorp Australia LLC, both PacifiCorp subsidiary companies, plus an equity contribution from the parent company.
Also in Victoria, US-based utility Entergy has been named preferred bidder for CitiPower electricity distribution company, serving the city center and inner suburbs of Melbourne. Entergy bid (US)$1.2 billion for the company, to include an equity investment and non-recourse debt. CitiPower serves approximately 230,000 customers. The purchase is Entergy`s first foray into Australia.