NextEra Energy subsidiary to sell ownership interest in four natural gas-fired power plants to affiliate of LS Power for US$1.05B; deal includes 507-MW Blythe, 668-MW Calhoun, 98-MW Cherokee, 879-MW Doswell facilities
JUNO BEACH, Florida
September 1, 2011
– NextEra Energy Resources, LLC, the competitive energy subsidiary of NextEra Energy, Inc. (NYSE: NEE), today announced that one of its subsidiaries 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.
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.
"While there are attractive aspects for each of these assets, they have a limited strategic fit in our portfolio," said Mitch Davidson, president and CEO of NextEra Energy Resources.
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.
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.
As was 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 a diverse mix of clean generating assets in 23 states and Canada, with a combined capacity of more than 16,880 megawatts.
Citi and Credit Suisse served as NextEra Energy Resources' financial advisors in this transaction. Hogan Lovells served as NextEra Energy Resources' outside legal counsel in this transaction.
NextEra Energy Resources
NextEra Energy Resources, LLC, is a clean energy leader and one of the largest competitive energy suppliers in North America. A subsidiary of Juno Beach, Fla.-based NextEra Energy, Inc. (NYSE: NEE), NextEra Energy Resources is the largest generator in North America of renewable energy from the wind and sun. It operates clean, emissions-free nuclear power generation facilities in New Hampshire, Iowa and Wisconsin as part of the NextEra Energy nuclear fleet, which is the third largest in the United States. NextEra Energy, Inc. had 2009 revenues of more than $15 billion, nearly 43,000 megawatts of generating capacity, and approximately 15,000 employees in 28 states and Canada. For more information, visit www.NextEraEnergyResources.com.
Cautionary Statements And Risk Factors That May Affect Future Results
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements typically express or involve discussion as to expectations, beliefs, plans, objectives, assumptions or future events or performance and often can be identified by the use of words such as ""may," "plan," "will," "expect," "believe," "anticipate," "estimate," and similar terms.
Although NextEra Energy, Inc. (NextEra) believes that its expectations are reasonable, because forward-looking statements are subject to certain risks and uncertainties, it can give no assurance that the forward-looking statements contained in this press release will prove to be correct, including NextEra's expectations with respect to the Blythe, Calhoun, Cherokee and Doswell Energy Centers. Important factors could cause NextEra's actual results to differ materially from those projected in the forward-looking statements in this press release. Factors that could have a significant impact on NextEra's operations and financial results, and could cause NextEra's actual results or outcomes, both generally and specifically with respect to the Blythe, Calhoun, Cherokee and Doswell Energy Centers, to differ materially from those discussed in the forward-looking statements include, among others:
Inability to complete the sale of the Blythe, Calhoun, Cherokee and Doswell Energy Centers due to the failure to satisfy all conditions precedent to closing of the sale
Inability to complete construction of, or capital improvements to, other NextEra power generation facilities
Inability to obtain the required regulatory approvals and third party consents for the sale of the Blythe, Calhoun, Cherokee and Doswell Energy Centers
Inability to obtain the supplies necessary for the operation and maintenance of the Blythe, Calhoun, Cherokee and Doswell Energy Centers or for the construction, operation, and maintenance of other NextEra power generation facilities
Inability to hire and retain skilled labor required for the operation of the Blythe, Calhoun, Cherokee and Doswell Energy Centers or other NextEra power generation facilities
Changes in laws, regulations, governmental policies and regulatory actions regarding the energy industry and environmental matters
Failure of the purchaser to comply with the financial terms governing the sale of the Blythe, Calhoun, Cherokee and Doswell Energy Centers
Inability of NextEra or its affiliates to access capital markets or maintain their current credit ratings
Failure of NextEra power generating facilities to generate the expected amount of electric generation
General economic conditions
Hazards customary to the operation and maintenance of power generation facilities, including unanticipated outages
Unusual or adverse weather conditions, including natural disasters
Transmissions constraints or other factors limiting NextEra's ability to deliver energy from NextEra's power generation facilities
Volatility in the price of energy
Failure of NextEra customers to perform under contracts
Increased competition in the power industry
Changes in the wholesale power markets
Costs and other effects of legal and administrative proceedings
Terrorism or other catastrophic events
These foregoing factors should be considered in connection with information regarding risks and uncertainties that may affect NextEra's future results included in NextEra's filings with the Securities and Exchange Commission (SEC), which are available at the SEC's website at www.sec.gov.