Continuing with efforts to shed non-core assets and improve itsbalance sheet, CMS Energy Corp. announced an agreement yesterday tosell its 80% ownership of the 236 MW Lakewood Cogeneration ventureto Consolidated Edison for $94 million. The sale will result in a$182 million reduction of project debt from the CMS balance sheet.

The sale was made to ConEdison’s generation subsidiary,Consolidated Edison Development. The deal is subject to FERCreview, and the parties expect to complete it in the secondquarter.

The Lakewood Cogeneration plant, located in Lakewood, NJ, hasbeen operating for several years, said CMS Spokesman Kelly Farr. Itis the only gas-fired plant on the East Coast that CMS has interestin. None of the plant’s gas contracts will be affected. A Japanesefirm called Tomen Corp. owns the other 20% of the plant.

“We are looking to expand our generation portfolio, but theexpansion areas we’re targeting are in concert with our gaspipeline businesses. We already have a concentration of generationin Michigan, and are looking to build in the Gulf Coast and upperMidcontinent. This Lakewood project simply didn’t fit.”

The sale brings CMS closer to its goal of $600 to $750 millionin non-core asset sales this quarter. By parting ways with theLakewood plant, its 49% interest in the Northern Header project inWyoming, its 49% interest in a Brazilian electric utility and allof its Michigan E&P properties to Quicksilver Resources, CMShas already accrued $465 million in sales. These deals represent atotal balance sheet debt reduction of $645 million, the companysaid.

CMS’ asset divestiture program is part of an overall plan toraise its stock price. After hitting a 52-week high of more than$47/share over last summer, CMS stock has plummeted to its current$20/share level. The stock price had sunk as low as the $16/sharerange earlier this year.

Last month, the Dearborn, MI-based company said it planned toteam the proceeds of the asset sales with a planned initial publicoffering (IPO) of a tracking stock for its electric and gasutility, Consumers Energy. CMS hoped to raise $600 million throughthe IPO, representing 20% of its financial interest in the utility.Farr said that the IPO is still planned to be held “as soon aspracticable” but no timetable has been issued yet.

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