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Progress will sell plants in Georgia

The $480-million sale will rid the utility of four plants that have been losing money.

By KRIS HUNDLEY
Published March 13, 2007

Progress Energy said Monday that it plans to sell substantially all of its Progress Ventures, a money-losing subsidiary in Georgia, for total proceeds and tax benefits of $480-million.

The deal reflects a trend among utilities to exit the merchant power sector and return to their core business of selling electricity on the retail market. And the sale fits Progress Energy's long-term strategy to shed nonessential assets and to trim its debts, including funds borrowed to pay for the acquisition of St. Petersburg's Florida Progress Corp. seven years ago.

Progress Ventures will sell four gas-fired generation plants in Georgia that produce 1,855 megawatts to a subsidiary of a fund managed by ArcLight Capital Partners LLC, an investment firm based in New York City.

In addition, Progress Ventures will assign its contract portfolio, which includes contracts with 16 Georgia electric membership cooperatives, to Constellation Energy Commodities Group Inc. of Baltimore.

Both transactions are expected to close in the second quarter. Combined, they will generate net proceeds of $265-million to Progress Energy, the parent of Progress Energy Florida in St. Petersburg.

In addition, the Raleigh, N.C., utility expects income tax benefits resulting from the loss on sale of these assets of about $215-million.

Kris Hundley can be reached at hundley@sptimes.com or (727) 892-2996.

[Last modified March 12, 2007, 22:43:44]