The PPL Corporation has announced that its subsidiary PPL Montana LLC will sell 11 hydroelectric power facilities to NorthWestern Energy.
The 11 hydropower plants have a combined output capacity of more than 630 MW and will net PPL (NYSE: PPL) US$900 million in cash.
The company said it expects the sale to close in the second half of 2014 after receiving proper regulatory approvals from both the Federal Energy Regulatory Commission (FERC) and Montana Public Service Commission.
“This is an opportunity to secure attractive shareowner value for high-performing, non-carbon assets,” PPL Corporation president and CEO William H. Spence said.
Included in the sale are Thompson Falls Dam on the Clark Fork River; Kerr Dam on the Flathead River; Madison Dam on the Madison River; Hauser, Holter, Black Eagle, Rainbow, Cochrane, Ryan and Morony dams along the Missouri River; and Mystic Lake Dam on West Rosebud Creek.
“This is a unique opportunity to acquire hydroelectric facilities dedicated to serving our Montana customers for generations to come,” said NorthWestern (NYSE: NWE) president and CEO Bob Rowe said. “These facilities were originally built as part of the integrated system that we own today and complement our existing set of supply resources. The addition of Montana-regulated, clean, sustainable and reliable hydro power will provide supply diversity to our portfolio and will reduce risks associated with variable fuel prices.”
The transaction is expected to allow NorthWestern to reduce its reliance on third-party power purchase agreements and spot market purchases, the utility said, more closely matching its electric generation resources with forecasted customer demand. Upon completion, about half of NorthWestern’s total energy needs in Montana will be met with hydro and wind generation.
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