DTE Energy has made a non-binding bid in response to FirstEnergy Corp.’s placing a ‘for sale’ sign in front of four of its predominantly coal-fired power plants in Ohio, after a deal to sell those assets to NRG Energy Inc. collapsed over the summer, a spokesperson for DTE Energy told NGI last Wednesday.

“We have submitted a bid” on the plants, DTE spokesperson John Austerberry said. Austerberry said that DTE’s non-binding bid doesn’t necessarily cover all four of the FirstEnergy power plants up for sale.

FirstEnergy in August said that it had canceled the $1.5 billion sale of four plants (2,535 MW) located along Lake Erie in Ohio to NRG in anticipation of a breach of their sale agreement by NRG (see NGI, Aug. 12).

Details of that transaction were first unveiled in November 2001. Under the deal, NRG agreed to buy the following plants from FirstEnergy: the 376 MW Ashtabula Plant in Ashtabula, the 648 MW Bay Shore Plant in Oregon, the 1,262 MW Eastlake Plant in Eastlake and the 249 MW Lake Shore Plant in Cleveland.

“In general, we are interested in assets of that type, large coal-fired power plants, because we have significant expertise in the purchasing and transportation of coal,” Austerberry noted. “We [also] have significant expertise in operating large coal-fired power plants and we have expertise in the marketplace for the output from plants of that type.”

An executive with FirstEnergy recently said that if the company decides not to sell the four plants, FirstEnergy will recognize a one-time, non-cash charge of $35 million in the fourth quarter.

“Since these units we’re being remarketed…we haven’t recorded depreciation expense for them since the sales agreement was terminated with NRG in August,” FirstEnergy President Tony Alexander said, noting that the company had received “several indicative, non-binding bids for these assets.”

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