2 Min Read
March 11 (Reuters) - U.S. power company Dominion Resources Inc said on Monday it had struck a deal to sell three power plants - one in Massachusetts and two in Illinois - to funds controlled by private equity firm Energy Capital Partners. The sale is expected to close in the second quarter of 2013 and generate after-tax proceeds of about $650 million, including cash tax benefits, Dominion said in a statement. The company, which did not disclose how much Energy Capital Partners was paying for the plants, said it plans to invest the proceeds in its regulated businesses and reduce its debt needs. The sale will require approval by the Federal Energy Regulatory Commission (FERC) and antitrust clearance, it said. The plants are the 1,528-megawatt (MW) Brayton Point coal, oil and natural gas plant in Massachusetts, the 1,158-MW Kincaid coal plant in Illinois, and Dominion's 50 percent stake in the 1,424-MW Elwood natural gas plant in Illinois. A unit of Japanese power company Electric Power Development Co Ltd, known as J-Power, owns the other half of the Elwood plant. Dominion has owned Brayton Point since 2005 and Kincaid since 1998. It has operated Elwood since the plant entered service in 1999. All three are "merchant" plants, meaning they are in deregulated markets where the plant owner must recover the cost of operating the plant from energy sales, not from rate payers. Dominion announced last September that it was exiting the merchant coal-fired generation business as part of a review of assets. U.S. power companies, including Dominion, plan to shut or convert more than 40,000 MW of smaller, older coal-fired plants over the next few years. Low natural gas prices and strict environmental rules have made coal the more expensive option in some areas. (See factbox ) Dominion also said last year that it would shut its merchant 566-MW Kewaunee nuclear power plant in Wisconsin in the second quarter of 2013 after failing to find a buyer for the reactor.