PPL Montana agrees to sell hydro facilities in $900M deal
A subsidiary of Allentown-based PPL Corp. said last week it agreed to sell its 11 hydroelectric facilities and a reservoir out West in a $900 million deal to South Dakota-based NorthWestern Corp.
The company does business as NorthWestern Energy.
The deal does not include PPL Montana’s interest in the Colstrip facility, which is a plant it owns along with NorthWestern Energy and other companies, or its J.E. Corette coal-fired facility that will be mothballed in 2015, according to PPL.
The $900 million price, in cash, is subject to certain adjustments, PPL said.
The deal includes more than 630 megawatts of generating capacity. It is expected to close in the second half of 2014 and requires state and federal approval.
In a related transaction, PPL Montana will pay $271 million to end a sale-leaseback arrangement for its interest in the Colstrip coal-fired plant. PPL estimates net proceeds from the transactions of about $623 million.
“This is an opportunity to secure attractive shareowner value for high-performing, non-carbon assets,” William H. Spence, PPL Corp.’s chairman, president and CEO, said in a statement.
PPL is not the only power company with midstate ties to announce plans to sell hydroelectric facilities recently.
Ohio-based FirstEnergy Corp. said in early September that subsidiaries asked federal energy regulators to sell hydroelectric power facilities to an independent power infrastructure investor.
The 527 megawatts of capacity are in western Pennsylvania, Virginia and West Virginia.
FirstEnergy, parent company of locally operating distribution utility Metropolitan Edison Co., called the move a noncore divestment.
NorthWestern Energy, the buyer from PPL, is an investor-owned utility and serves about 670,000 electricity and natural gas customers, according to its website.
Shares of NorthWestern are traded on the New York Stock Exchange under the ticker symbol NWE.
PPL companies deliver electricity and natural gas to about 10 million customers in the United Kingdom and the United States, including parts of the midstate, sell energy in key U.S. markets and own more than 18,000 megawatts of U.S. generating capacity.
Shares of PPL Corp. are traded on the New York Stock Exchange under the ticker symbol PPL.