RICHMOND, Va. - Dominion Resources Inc. said Monday that it has agreed to sell three power stations to funds controlled by the private equity firm Energy Capital Partners as part of its plan to exit the merchant coal-fired generation business.
The Richmond, Va.-based energy provider said the sale is expected to result in after-tax proceeds of about $650 million, which includes cash tax benefits generated by the sale.
The deal remains subject to Federal Energy Regulatory Commission and antitrust approvals and is expected to close in the second quarter.
The stations include a 1,528-megawatt power station in Somerset, Mass., with three coal-fired units and one unit fired by oil or natural gas; a 1,158-megawatt power station in the southern Illinois town of Kincaid with two 579-megawatt coal-fired units; and a 1,424-megawatt power station outside Chicago, with nine natural gas-fired combustion turbines.
The buyer has offices in Short Hills, N.J., and San Diego.
Dominion said last year that it would exit the merchant coal-fired generation business as part of a refocusing of its resources on the more profitable ventures. Coal plants have become less economical because strong production of natural gas has made that fuel so much cheaper and utilities are being pushed by environmental rules to rely less on coal.
The company said it plans to invest the proceeds of Monday's sale in its regulated businesses and to reduce debt.
In October, Dominion also had announced plans to close and decommission its Kewaunee Power Station in Wisconsin after it was unable to find a buyer for the 556-megawatt nuclear power plant.
Dominion Resources, one of the nation's largest producers and transporters of energy, has a portfolio of about 27,500 megawatts of generation, 11,000 miles of natural gas transmission, gathering and storage pipeline and 6,300 miles of electric transmission lines. It also operates one of the nation's largest natural gas storage systems with 947 billion cubic feet of storage capacity and serves retail energy customers in 15 states.