CenterPoint Energy Inc. said it has completed the $3.65 billion sale of Texas Genco Holdings Inc., the company's wholesale electric power generation business, to Texas Genco LLC, formerly known as GC Power Acquisition LLC.
The sale completes the final step of a two-part transaction announced last July in which Texas Genco LLC acquired CenterPoint Energy's wholesale electric power generation company (see NGI, July 26, 2004). In the first step of the transaction, the sale of the company's fossil generation assets (coal, lignite and gas-fired plants), CenterPoint received $2.231 billion in December 2004, which the company used primarily to pay down debt. With the completion of the sale, CenterPoint Energy has received about $2.9 billion in cash proceeds for its interest in Texas Genco Holdings.
"Selling our unregulated wholesale power generation business was a major part of our plan when we formed CenterPoint Energy to be primarily a regulated energy delivery business operating electric and natural gas utilities in the U.S.," said David M. McClanahan, CEO of CenterPoint Energy. "The sale enables us to significantly reduce our debt and turn our full attention to enhancing the business performance of our core businesses of energy delivery."
The final step included the purchase of the CenterPoint subsidiary, which holds a 30.8% share of the South Texas Project nuclear generating facility (STP). CenterPoint Energy said the $700 million in cash proceeds from this final step of the sale will be used primarily to pay down debt. As a result of the transaction, CenterPoint Energy no longer has any ownership interest in Texas Genco Holdings Inc., in its subsidiary, Texas Genco LP, in STP or in any other power generation assets.
The Nuclear Regulatory Commission approved the STP license transfer last week. In addition, the NRC approved the transfer of the license covering AEP Texas Central Company's interest in STP to Texas Genco. Texas Genco said it expects to complete its acquisition of a share of AEP's ownership interest within the second quarter of 2005. Once that deal is complete, Texas Genco will hold a 44% ownership interest in STP.
Intelligence Press Inc. All rights reserved. The preceding news report
may not be republished or redistributed, in whole or in part, in any
form, without prior written consent of Intelligence Press, Inc.