PPL Acquiring Combined Cycle Plant from AES

PPL Corporation announced this morning that PPL Generation, LLC, its competitive generation subsidiary, agreed to acquire AES Ironwood, L.L.C. and AES Prescott, L.L.C., which together own and operate the 705-megawatt AES Ironwood combined-cycle natural gas-fired power plant in Lebanon, Pa., from a subsidiary of The AES Corporation.

Total consideration for the transaction is approximately $304 million, consisting of a cash purchase price of $87 million, which includes $4.8 million in expected working capital, and approximately $217 million of net project indebtedness of AES Ironwood, L.L.C.

The plant began operation in 2001, and for the past four years PPL EnergyPlus, LLC, the marketing and trading subsidiary of PPL, has supplied natural gas for the operation of the plant in return for securing its full output under a tolling agreement that expires in 2021.

"The acquisition of the Ironwood facility is an excellent opportunity for us to bring into full ownership additional combined-cycle gas generation in PJM at an attractive valuation," said Bill Spence, PPL's president and chief executive officer.

The sale is expected to close in the second quarter of 2012 following the receipt of necessary regulatory approvals and third-party consents.

The acquisition is not expected to have a material impact on PPL's earnings or financing plans.

PPL Corporation owns or controls about 19,000 megawatts of generating capacity in the United States.

Separately, AES also confirmed that it has signed an agreement to sell AES Red Oak LLC, an 832 megawatt (MW) combined cycle gas turbine plant located in New Jersey, to Energy Capital Partners.