NRG Energy Inc. Enters into Agreements to Sell Two Generating Plants for $138 Million
As part of its asset rebalancing program, NRG Energy, Inc. (NYSE:NRG)
has agreed to sell two of its generating stations: the 525 MW Seward
power plant in New Florence, Pennsylvania and the 352 MW Shelby County
power plant in Neoga, Illinois.
“NRG is focused on maintaining a robust presence and balance through
conventional generation assets that complement each other in respect to
geography, technology and smart fuel diversity,” said David Crane, CEO
NRG. “By streamlining our fleet, we can create additional value for our
shareholders and meet the needs of our customers with reliable,
efficient and economic power. This is part of our ongoing and deliberate
strategy of portfolio optimization.”
The Seward facility, which is located in the PJM Interconnection, is
being acquired by Seward Generation, LLC, a Robindale Energy Services,
Inc. company. As part of the sale agreement, NRG Energy Services will
provide operations and maintenance services to the Seward plant on
behalf of Robindale Energy using the current NRG workforce.
The Shelby County facility, which is located in the MISO
Interconnection, is being acquired by an affiliate of Rockland Capital,
LLC. The station is a 352 MW natural gas-fueled, simple-cycle combustion
turbine peaking plant with eight General Electric LM6000 aero-derivative
combustion units.
“Operating a diverse generation fleet is a key component of NRG’s
continued success in every region in which we operate,” said Mauricio
Gutierrez, COO NRG. “As part of our asset optimization initiative, we’ve
identified a few specific facilities that would be better suited in
other hands in markets where we can transact at good value while
avoiding future capital expenditures.”
The aggregate purchase price for the two generation facilities, both of
which are owned by GenOn Energy Inc, an excluded project subsidiary of
NRG, is approximately $138 million comprised of cash and other
consideration. Together, these assets were projected to average $10.5
million of Adjusted EBITDA annually over the next 3 years and require
approximately $17 million in maintenance capital expenditures over the
same period1. The transactions are expected to close in the
first quarter of 2016, subject to regulatory approvals, including the
Federal Energy Regulatory Commission.
Table 1: Adjusted EBITDA
|
|
($ in millions)
|
|
2016-2018
Average
|
Income before Income Taxes
|
|
$ (2.7)
|
Depreciation and Amortization
|
|
13.2
|
Adjusted EBITDA
|
|
$ 10.5
|
About NRG
NRG is leading a customer-driven change in the U.S. energy industry by
delivering cleaner and smarter energy choices, while building on the
strength of the nation’s largest and most diverse competitive power
portfolio. A Fortune 200 company, we create value through reliable and
efficient conventional generation while driving innovation in solar and
renewable power, electric vehicle ecosystems, carbon capture technology
and customer-centric energy solutions. Our retail electricity providers
serve almost 3 million residential and commercial customers throughout
the country. More information is available at www.nrg.com.
Connect with NRG Energy on Facebook and follow us on Twitter @nrgenergy.
NRG Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements are
subject to certain risks, uncertainties and assumptions and include
NRG’s expectations regarding asset sales and forward-looking statements
typically can be identified by the use of words such as “will,”
“expect,” “believe,” and similar terms. Although NRG believes that its
expectations are reasonable, it can give no assurance that these
expectations will prove to have been correct, and actual results may
vary materially. Factors that could cause actual results to differ
materially from those contemplated above include, among others, general
economic conditions, hazards customary in the power industry, failure of
counterparties to perform under contracts and our ability to receive
regulatory approvals. NRG undertakes no obligation to update or revise
any forward-looking statements, whether as a result of new information,
future events or otherwise. The foregoing review of factors that could
cause NRG’s actual results to differ materially from those contemplated
in the forward-looking statements included in this news release should
be considered in connection with information regarding risks and
uncertainties that may affect NRG’s future results included in NRG’s
filings with the Securities and Exchange Commission at www.sec.gov.
1 Based on market information as of NRG Energy’s 3rd Quarter
2015 earnings call on November 4, 2015
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