Little Rock, Arkansas – In a move that will help meet the energy needs of Arkansans while keeping costs down, Entergy Arkansas, Inc. announced today that it has signed an agreement to acquire a portion of the Union Power Station near El Dorado.
“Entergy Arkansas is focused on keeping customer rates among the lowest in the country and helping Arkansas’ economy to grow,” said Hugh McDonald, Entergy Arkansas president and chief executive officer. “The Union Power Station purchase is a significant step in the ongoing modernization of our generation fleet. It’s clean, it’s efficient, and we’re buying it at a good price. Those factors combine to help us keep rates down, keep reliability up, and maintain an environmental profile that’s among the cleanest in the industry.”
The Union Power Station, a 1,980-megawatt (summer rated) generating facility, entered commercial service in 2003 and consists of four highly efficient combined-cycle natural-gas-fired generating units, or CCGTs, each rated at 495 MW. Under the Asset Purchase Agreement, Entergy Arkansas and Entergy Texas, Inc. have each agreed to acquire one unit, and Entergy Gulf States Louisiana, L.L.C. has agreed to acquire two units.
The plant purchase price is $948.0 million ($479/kW), or $237.0 million per unit, subject to adjustments. The purchase price is approximately half the cost to build a comparable new CCGT facility. The station is owned by Union Power Partners, L.P., an independent power producer and wholly owned by Entegra TC LLC. Entergy Arkansas will operate the plant, which sits on 330 acres in Union County.
“We are also fortunate that we have the opportunity to invest in an Arkansas facility that provides high-quality jobs to our state,” said McDonald. “This acquisition complements the transmission enhancements we are planning to make across the service territory that will improve reliability for our customers.”
The purchase is contingent upon, among other things, obtaining necessary approvals, including acceptable cost recovery, from the various federal and state regulatory authorities and the expiration of the waiting period under the Hart-Scott-Rodino antitrust law. The targeted closing date is late 2015.
Entergy Arkansas provides electricity to approximately 700,000 customers in 63 counties. Entergy Arkansas is a subsidiary of Entergy Corporation, an integrated energy company engaged primarily in electric power production and retail distribution operations.
Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including more than 10,000 megawatts of nuclear power, making it one of the nation’s leading nuclear generators. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $11 billion and approximately 14,000 employees.
In this news release, and from time to time, Entergy Arkansas, Inc. makes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Except to the extent required by the federal securities laws, Entergy Arkansas undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Forward-looking statements involve a number of risks and uncertainties. There are factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including (a) those factors discussed in this news release and in Entergy Arkansas’ most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q and Entergy Arkansas’ other reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with rate proceedings, formula rate plans and other cost recovery mechanisms; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) nuclear plant relicensing, operating and regulatory risks, including any changes resulting from the nuclear crisis in Japan following its catastrophic earthquake and tsunami; (e) changes in decommissioning trust fund values or earnings or in the timing or cost of decommissioning Vermont Yankee or any of Entergy’s other nuclear plant sites; (f) legislative and regulatory actions and risks and uncertainties associated with claims or litigation by or against Entergy and its subsidiaries; and (g) economic conditions and conditions in commodity and capital markets during the periods covered by the forward-looking statements, in addition to other factors described elsewhere in this release and subsequent securities filings.