Duke says it will sell power generation assets to LS Power - NewsOn6.com - Tulsa, OK - News, Weather, Video and Sports - KOTV.com |

Duke says it will sell power generation assets to LS Power

Updated:
CHARLOTTE, N.C. (AP) _ Following through on a pledge to shed most of its merchant power plants, Duke Energy Corp. said Monday it will sell its North American wholesale power generation assets outside the Midwest for about $1.5 billion to a subsidiary of LS Power Equity Partners.

The deal has a minimum value of $1.48 billion, though it could rise to $1.54 billion if certain performance measures are met, the Charlotte-based energy company said.

After the announcement, shares of Duke Energy rose 8 cents to $27.87 on the New York Stock Exchange.

Duke Energy said it expects a one-time, pretax gain of about $330 million from the sale of the Duke Energy North America power plants. The assets include about 6,200 megawatts of power generation, located in the Western and Northeastern parts of the United States, the company said.

``Completing the exit from DENA's business is a major objective for 2006,'' Paul Anderson, Duke Energy's chairman and chief executive, said in a statement. ``This agreement to sell DENA's entire fleet outside the Midwest puts us well on our way only nine days into the year.''

In September, Duke Energy took a large charge against third-quarter earnings for the planned sale of the merchant power assets.

Along with other U.S. power companies in the late 1990s, Duke Energy had moved aggressively into power and gas trading businesses that appeared to offer impressive opportunities. Enron Corp.'s failure in December 2001 threw the entire U.S. energy industry into a slump.

In 2002, Duke's investment in unregulated merchant power plants became a liability when demand dropped following a price spike for natural gas. The plants were designed to produce power for sale to utilities and big industrial users in California, the Northeast and the Midwest.

Duke Energy, which is in the process of acquiring rival Cinergy Corp. in a $9 billion deal, said in November it would transfer the unit's commercial portfolio of derivatives contracts to Barclays Capital, the investment banking division of British bank Barclays Bank PLC.

Duke expects the proceeds from the LS Power sale and Barclays Capital's deal to yield net cash in excess of $500 million.

Duke has said it will combine its merchant power plants in the Midwest, which generate about 3,600 megawatts of power, with Cinergy's commercial operations in the region once the merger is completed.

LS Power Equity Partners is a member of the LS Power Group. Founded in 1990, the LS Power Group maintains offices in New York, New Jersey, Missouri, and Florida.
Powered by Frankly
News On 6
303 N. Boston Ave.
Tulsa, OK 74103
Newson6.com is proud to provide Oklahomans with timely and relevant news and information, sharing the stories, pictures and loves of Oklahomans across our great state.
All content © Copyright 2000 - 2017 KOTV. Oklahoma Traveler™ is a registered trademark of Griffin Communications. All Rights Reserved.
For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices.