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Entergy to Buy Gas-Fired Power Plants from KGen

New Orleans-based Entergy Corp. said Friday its subsidiaries in Mississippi and Arkansas have agreed to purchase two combined-cycle gas turbine (CCGT) power plants from divisions of Houston-based KGen Power Corp. The company also said it had completed its purchase of a third CCGT facility in Louisiana from Acadia Power Partners LLC.

"These potential purchases are a continuation of Entergy's portfolio transformation strategy that we've been carrying out over the last five years," Entergy spokesman Michael Burns told NGI on Friday. "Our effort is to provide reliable, affordable power now and well into the future by acquiring modern, highly efficient combined-cycle plants in our service territory."

Entergy Mississippi Inc. will acquire the Hinds Energy Facility from KGen Hinds LLC for about $206 million, roughly $458/kW. The plant, located in Jackson, MS, has a summer rating output of 450 MW.

Meanwhile, Entergy Arkansas Inc. will buy the Hot Spring Energy Facility from KGen Hot Spring LLC for about $253 million, or about $408/kW. The 620 MW plant is in Hot Spring County.

Both Entergy subsidiaries plan to make various plant upgrades after closing, which is anticipated to occur in mid-2012. The acquisitions are contingent upon regulatory and permitting approval from federal and state agencies. KGen Power shareholders also must approve the deal; a vote is expected in mid-June.

In a separate announcement Friday, Entergy said a third subsidiary, Entergy Louisiana LLC, has completed the acquisition of the 580 MW Acadia Energy Center Power Block 2 facilities from Acadia Power for about $300 million. The plant is near Eunice, LA.

"We view this as a sound investment to help meet the future power demand of our customers," Entergy Louisiana CEO Bill Mohl said, adding that the plant "is an important addition to our generation fleet that will provide needed and beneficial long-term electricity supply to our customers across the region."

Entergy also purchased 50% of the Louisiana plant's common assets. The other 50% interest and the Acadia Energy Center Power Block 1 facilities were sold in February 2010 to Cleco Power LLC, which serves as operator of the entire plant.

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