Business

Business transaction: FirstEnergy selling interest in 713 MW of hydro assets

FirstEnergy Corp. is selling 713 MW of hydro, as well as 902 MW of natural gas, to a subsidiary of LS Power Equity Partners III LP in a deal valued at $825 million.
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Business transaction: FirstEnergy selling interest in 713 MW of hydro assets

FirstEnergy Corp. is selling 713 MW of hydro, as well as 902 MW of natural gas, to a subsidiary of LS Power Equity Partners III LP in a deal valued at $825 million.

This sale was originally announced in January and is consistent with “FirstEnergy’s strategy to transition to a fully regulated company and exit from commodity-exposed generation,” the company says.

The hydro plant affected is the 3,003-MW Bath County pumped storage project, and the sale involves a portion of Allegheny Generating Company’s ownership interest in the project, specifically the 713 MW that “represents Allegheny Energy Supply’s competitive interest.” In total, First Energy owns 40% of the project through subsidiaries, while Dominion Energy owns the remaining 60%.

Bath County was completed in 1985 in Warm Springs, Va., and is the largest pumped-storage plant by generating capacity in the world. It has an upper reservoir with 265 surface acres and a lower reservoir with 555 surface acres. For more information on the plant, click here.

FirstEnergy says the 20 employees at the affected plants will be offered employment with the new owner.

The sale of the interest in the Bath County project is expected to close in the first quarter of 2018. The transactions are subject to various customary and other closing conditions, including receipt of regulatory approvals and third-party consents.

After the sales, FirstEnergy will own or control generating capacity totaling about 15,337 MW from nuclear, coal, gas, hydro, wind and solar facilities in Ohio, Pennsylvania, West Virginia, New Jersey, Virginia and Illinois, the company said.

Proceeds from the sales are expected to be invested in FirstEnergy’s unregulated money pool and may be used for the repayment of debt and other corporate purposes.