HOUSTON, Dec 26 (Reuters) - Salt River Project, the largest supplier of electricity in the Phoenix area, has agreed to buy a 625-MW, natural gas power plant in Arizona from a unit of Sempra Energy for $371 million, the companies said on Wednesday.
Salt River Project, or SRP, will buy one of two units at the Mesquite Power plant near Arlington, Arizona and a 50-percent interest in the plant’s infrastructure for about $594 per kilowatt.
“Load growth is relatively small right now, but when it returns, this plant will position us well in the long term to meet our customers’ needs at a reasonable cost,” said SRP general manager Mark Bonsall, in a statement.
The purchase, which is subject to approval from the Federal Energy Regulatory Commission and other agencies, may close in the first quarter of 2013.
SRP also will become the operator of both units at the Mesquite power plant which has been in service since 2003. The plant is located about 47 miles (75 km) west of Phoenix.
The sale by Sempra U.S. Gas and Power will reduce that company’s “exposure to the merchant power markets while also allowing us to put greater emphasis on growing our southeast natural gas portfolio,” said Jeffrey W. Martin, president of Sempra U.S. Gas & Power. The deal “will enable us to redeploy capital to expand our growing presence in the natural gas sector.”