FirstEnergy agrees to sell hydroelectric, natural gas assets to LS Power

FirstEnergy Corp., a diversified energy company based in Ohio in the US, has agreed to sell four natural gas plants in Pennsylvania and a portion of its hydroelectric power station in Virginia to a subsidiary of  LS Power Equity Partners III, LP, of New York.

The all-cash transaction, estimated to be worth around US$925 million, is expected to close in the third quarter of 2017 upon approval by the Federal Energy Regulatory Commission (FERC) and other agencies.

The power stations included in the sale are owned directly or indirectly by FirstEnergy subsidiaries Allegheny Energy Supply Company, LLC, and Allegheny Generating Company.

The said assets have a total capacity of 1,572 megawatts (MW).  The 23 current employees at these power stations will be offered employment with the new owner.  The transaction includes:

• Bath County Hydro (713 MW pumped-storage hydro) in Warm Springs, Virginia (which represents the FirstEnergy competitive ownership interest in the power station)
• Springdale Generating Facility Units 1-5 (638 MW natural gas) in Springdale Township, Pennsylvania.
• Chambersburg Generating Facility Units 12-13 (88 MW natural gas) in Guildford Township, Pennsylvania.
• Gans Generating Facility Units 8-9 (88 MW natural gas) in Springhill Township, Pennsylvania.
• Hunlock Creek (45 MW natural gas) in Hunlock Creek, Pennsylvania.

FirstEnergy announced in November 2016 that it was moving away from competitive generation markets and was exploring a variety of options, including seeking to move some of its competitive assets to more regulated or regulated-like constructs, or selling or deactivating additional units.  The sale of these plants is consistent with FirstEnergy’s strategy of operating as a fully regulated utility company.

Upon completion of the sale, FirstEnergy will own or control a total generating capacity of approximately 15,380 MW from nuclear, coal, hydro, wind and solar facilities across Ohio, Pennsylvania, West Virginia, New Jersey, Virginia and Illinois.

LS Power, an employee-owned, independent power company with offices in New York, New Jersey, Missouri and California, is a developer, owner, operator and investor in power generation and electric transmission infrastructure throughout the US.