NRG Energy reported late last week that it has entered into anagreement with Duke Energy North America LLC (DENA) to acquire anatural gas-fired 720 MW winter-rated/640 MW summer-rated powerfacility that is currently under construction in Audrain County,MO.

Construction of the Audrain Generating Station began in May2000. Located on a Greenfield site about 90 miles northwest of St.Louis, the project – which consists of eight turbines – is expectedto begin commercial operation by June 2001.

“This acquisition complements NRG’s strategy of developing asignificant portfolio of generation assets located near majormetropolitan areas experiencing substantial load growth,” saidDavid H. Peterson, NRG’s CEO. “It also serves to strengthen ourpresence in the North Central region of the United States and uponcommercial operation will be immediately earnings accretive.”

Although terms of the deal were not discussed, NRG said itexpects the project to contribute three to five cents to earningson an annual basis and to be a contributor to the company’s 25%earnings growth objective. Both companies said they expect the dealto close by the end of the first quarter, pending necessaryregulatory approvals.

“The sale of the Audrain facility is consistent with DukeEnergy’s portfolio management approach to business,” said JimDonnell, DENA’s CEO. “Our ability to actively manage our portfolioof assets and trading positions, enhances the efficiency in whichwe recycle capital across Duke Energy to support our ongoingdevelopment and business endeavors. We’re on target to deliverupward of 50 generation facilities, totaling more than 26,000megawatts by summer 2004, and remain focused on our commercialobjective of building regional energy businesses in the high-demandregions of North America.”

The plant is one of six merchant facilities DENA will bring online by this summer. The other facilities are located in Arizona,Illinois, Oklahoma and two in Mississippi that together totalapproximately 3,400 megawatts.

“This facility has excellent access to high voltage transmissionsystems and major gas pipelines in the Chicago-St. Louis-NewOrleans corridor which will give us greater flexibility in tradingaround our current assets and those in development,” said CraigMataczynski, CEO of NRG North America. “The project is dual-fuelcapable, meaning it may use both natural gas and oil, which givesus the ability to switch fuels during times of volatile fuelprices.”

The Audrain facility was designed and is being built byDuke/Fluor Daniel (D/FD).

Alex Steis

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