Public Service Enterprise Group (PEG) found buyers for two Texas
power plants in deals worth $687 million, after saying in August it
would auction the assets.
Asset deals in the U.S. power sector have increased as companies
look to position themselves in the face of ongoing weakness in
power prices and uncertainty over environmental regulations. Some
buyers are looking for exposure to a possible rebound in regional
power markets, while some sellers want to shed exposure to weak and
often volatile power prices amid a prolonged slump in natural gas
prices. Wholesale electricity prices in the U.S. are tied heavily
to gas prices.
The New Jersey utility and generation company said it would take
bids on two natural-gas fired plants, known as Odessa and
Guadalupe, with a combined output of 2,000 megawatts, or enough
electricity to power about one million typical homes.
The company will sell its Odessa facility in west Texas to High
Plains Diversified Energy Corp., a local municipal utility group.
MinnTex Power Holdings LLC, an entity managed by Wayzata Investment
Partners LLC, will acquire the limited partnership that owns PSEG's
Guadalupe facility in south Texas.
The deals are expected to close during the first half of the
year.
The assets will be accounted for as discontinued operations in
the company's 2010 fiscal year. An expected gain of 1 cent a share
from the sale will be reported under 2011 discontinued
operations.
Shares of the utility company were inactive in pre-market
trading Thursday and closed at $32.16 yesterday. The stock is down
3.7% for the year.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909;
Andrew.FitzGerald@dowjones.com