Edison International (EIX) said Tuesday its utility plans to sell its share in the Four Corners coal-fired power plant in New Mexico to Pinnacle West Capital Corp. (PNW) unit Arizona Public Service Co. for $294 million.
Edison will sell APS its 48% stake in Units 4 and 5 of the plant, subject to approval from federal and state regulators in Arizona and California, Edison spokesman Gil Alexander said.
Edison had been planning to sell its stake in the plant to comply with a California law that requires utilities to phase out their coal-fired power purchases. The law prohibits California utilities from signing new contracts for coal-fired power or renewing existing contracts for coal-fired power.
APS said it plans to shut down Units 1, 2 and 3 of the plant, which are older and less efficient, and install emission-control equipment on Units 4 and 5. APS, which operates the plant, owns 100% of the older units and co-owns Units 4 and 5 with Edison, PNM Resources Inc. (PNM), Salt River Project, El Paso Electric Co. (EE) and Tuscon Electric Power.
The U.S. Environmental Protection Agency in October proposed that APS install equipment on the oldest three units of the plant to cut emissions of nitrogen oxides by 80%. Pollution from the 2,250-megawatt plant contributes to haze that obscures visibility in Mesa Verde and several other national parks and wilderness areas.
The EPA estimated that the new equipment would cost about $717 million. But APS has estimated that the EPA's plan would cost $875 million, and is proposing an alternative that would cost about $95 million.
Edison will purchase power from the market to replace the power it now receives from Four Corners, Alexander said.
Shares of Edison were recently trading 9 cents lower at $37.47; shares of Pinnacle were trading 1 cent higher at $41.75.
-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468