NextEra Subsidiary to Sell Four Generating Assets

A NextEra Energy Resources, LLC, subsidiary has entered into an agreement to sell its ownership interest in a portfolio of natural gas-fired generating assets to an affiliate of LS Power for $1.05 billion, subject to working capital and other adjustments.

Only two of the assets are located in an organized market, and only one of those is located in a state which also has an appreciable measure of retail choice.

The transaction includes the 507-megawatt Blythe Energy Center, a natural gas-fired facility located in Blythe, Calif.; the 668-megawatt Calhoun Energy Center, a natural gas-fired facility located in Eastaboga, Ala.; the 98-megawatt Cherokee Energy Center, a natural gas-fired facility located in Gaffney, S.C.; and the 879-megawatt Doswell Energy Center, a natural gas-fired facility located in Ashland, Va.

The transaction is expected to result in net cash proceeds of approximately $500 million after the repayment of debt and transaction costs, and a taxable gain, which is expected to be largely offset by deferred tax assets. The transaction will also result in a one-time after-tax charge of approximately $97 million, which the company expects to exclude from adjusted earnings.

The sale is expected to be accretive to future years' earnings per share.

NextEra said that the assets have "limited strategic fit" in its portfolio.

A NextEra Energy Resources' affiliate will continue to operate three of the facilities included in the sale for an initial period of five years and the fourth facility for an initial two-year period under service contracts.

The transaction is expected to close in the fourth quarter of 2011, pending receipt of necessary regulatory approvals and third-party consents.

As previously announced, NextEra Energy Resources plans to continue to explore options associated with its Rhode Island State Energy Center, which may include selling the asset.

Following the closing of the sale, NextEra Energy Resources will continue to own and operate generating assets in 23 states and Canada, with a combined capacity of more than 16,880 megawatts.