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Exelon sells 3 power plants to Raven for $400M

by Claire Poole  |  Published August 10, 2012 at 9:38 AM
exelon_227x128.jpgChicago utility giant Exelon Corp. said Thursday, Aug. 9, it reached an agreement to sell its three coal-fired power plants and related assets in Maryland to Raven Power Holdings LLC, a new portfolio company of energy and power-focused private equity firm Riverstone Holdings LLC, for $400 million. Last year analysts had thought they might fetch close to $1 billion. Exelon said the sale will generate about $205 million in cash tax benefits, with most of that realized in 2012 and 2013.

Exelon said it expects to book a pretax loss of $275 million in the third quarter to reflect the difference between the estimated sale price and the value of the plants carried on the company's books. The facilities include the 1,273-megawatt Brandon Shores coal plant and 976-megawatt H.A. Wagner coal, natural gas and oil plant in Pasadena, and the 399-megawatt C.P. Crane coal and oil plant in Middle River.

Raven said it planned to offer pay and benefits comparable to those now received by the 420 workers employed at the plants. Exelon agreed to sell the plants in exchange for regulatory approval for its purchase of Constellation Energy Group Inc., which closed in March.

The Federal Energy Regulatory Commission and Department of Justice must approve the sale, which is expected to close in the fourth quarter. Riverstone co-founders Pierre Lapeyre and David Leuschen said the plants have an experienced workforce and a strong record of safe and environmentally sound operation.

Citigroup Inc.'s Jack Paris and Joe Sauvage and Goldman, Sachs & Co.'s Jeff Pollard and Matt Gibson advised Exelon. Morgan, Lewis & Bockius LLP provided legal counsel, including Barbara Shander, John McAleese III, Louis Ballezzi, Jared Zane, Kate Moll-Taylor and Alexandra Freidberg. Vinson & Elkins LLP's Trina Hill Chandler, Chris Amandes, John Decker and Roxanne Almaraz assisted Riverstone.

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Tags: Exelon Corp. | Raven Power Holdings LL | Riverstone Holdings LLC

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Claire Poole

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