NextEra To Sell Maine Hydroelectric Assets to Brookfield
First Published Saturday, 22nd December 2012 08:30 am - © 2012 Dow Jones
By Kristin Jones
NextEra Energy Inc. (NEE) has agreed to sell its interests in Maine hydroelectric plants and storage reservoirs to Brookfield Renewable Energy Partners L.P. (BRPFF, BEP.UN.T).
The transaction is valued at $760 million, including around $700 million in debt.
The purchase consists of 19 hydroelectric facilities and eight storage reservoir dams, with a total capacity of 351 megawatts, with expected average annual generation of around 1.6 million megawatt hours. The output from the facilities, including the two largest hydroelectric plants in Maine, is sold into the New England wholesale power market.
The projects are mostly located on the Kennebec, Androscoggin and Saco river systems.
"These proven generation assets are an ideal investment for us as they complement our existing hydro fleet in Maine where we have a long operating history," said Brookfield Chief Executive Richard Legault.
He added that the acquisition increases the renewable-energy company's footprint in the New England market to nearly 1,000 megawatts of capacity, while positioning the company to benefit from rising electricity prices over time.
The deal is expected to close in the first quarter of 2013.
NextEra, which owns Florida Power & Light and is the largest U.S. renewable-energy generator, has benefited from a recovery in power demand. However, like other companies with units that compete on price in the open market, NextEra has faced challenges from low natural-gas and power prices at its wholesale power business.
The deal isn't expected to have a material impact on NextEra's financial position or future financial results.
"While this is an attractive portfolio in many respects, this transaction enables us to further optimize our power generation portfolio and concentrate our resources on areas with greater potential growth for our business," said NextEra Chief Executive Armando Pimentel.
NextEra shares closed at $69.96 on Friday, and are up 15% so far this year. Brookfield shares closed at $29.43, and are up 10% since the start of the year. Both were unchanged after hours.
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