BATON ROUGE – In a move that will help meet the energy needs of Louisianans while keeping down costs, Entergy Gulf States Louisiana, L.L.C. announced today that it has signed an agreement to acquire two of the four units at the Union Power Station near El Dorado, Ark., near the Louisiana border.
“Louisiana is the epicenter of an industrial renaissance that will bring scores of new jobs and drive demand for electricity in our state by as much as 1,600 megawatts by the year 2019,” said Phillip May, president and chief executive officer for Entergy’s Louisiana utilities. “The acquisition of these highly efficient units will help us meet some of that increased load while keeping ratepayers’ costs among the lowest in the country.”
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 Texas, Inc. and Entergy Arkansas, 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 approximately $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. Entergy New Orleans will receive 20 percent of the output from the Entergy Gulf States Louisiana units via an at-cost purchase power agreement, subject to City Council of New Orleans approval.
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 Louisiana, LLC and Entergy Gulf States Louisiana, L.L.C. provide electric service to more than one million Louisiana customers. Additionally, Entergy Gulf States Louisiana provides natural gas service to nearly 93,000 customers in the greater Baton Rouge area. With operations in southern, central and northeastern Louisiana, the companies are subsidiaries of Entergy Corporation.
Entergy Corporation is 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 Gulf States Louisiana, L.L.C. 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 Gulf States 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 Gulf States’ most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q and Entergy Gulf States’ 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.