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UPDATE 3-Dominion Resources to sell three power plants
March 11, 2013 / 1:20 PM / 5 years ago

UPDATE 3-Dominion Resources to sell three power plants

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
    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.

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