NextEra Energy Inc. (NEE) said that its competitive energy subsidiary NextEra Energy Resources LLC has agreed to sell its ownership interest in a portfolio of natural gas-fired generating assets to LS Power for $1.05 billion.
The natural gas-fired facilities to be disposed as part of the transaction include the 507-megawatt Blythe Energy Center in Blythe, California; the 668-megawatt Calhoun Energy Center in Eastaboga, Alabama; the 98-megawatt Cherokee Energy Center in Gaffney, South Carolina; and the 879-megawatt Doswell Energy Center in Ashland, Virginia.
Though the assets will be sold effective immediately, NextEra Energy said that an affiliate of NextEra Energy Resources will continue to operate three of the facilities included in the sale for an initial period of five years and the fourth facility for an initial two-year period under service contracts.
NextEra Energy expects to close the transaction in the fourth quarter of 2011, pending receipt of necessary regulatory approvals and third-party consents. The company expects the sale to result in net cash proceeds of about $500 million after the repayment of debt and transaction costs, and a taxable gain, which is expected to be largely offset by deferred tax assets.
Furthermore, the transaction will also result in a one-time after-tax charge of $97 million, which the company expects to exclude from adjusted earnings. Hence, the sale is expected to be accretive to the company’s earnings per share beyond 2011.
Going forward, NextEra Energy Resources plans to continue to explore options related to the sale of a fifth power facility, the Rhode Island State Energy Center in Rhode Island.
Based in Juno Beach, Florida, NextEra Energy Inc. generates, transmits, distributes and sells electric energy in Florida. The company competes primarily with the likes of TECO Energy Inc. (TE) and Progress Energy Inc. (PGN).
NextEra Energy currently retains a Zacks #3 Rank (short-term Hold rating). We maintain our long-term Neutral rating on the stock.
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