MINNEAPOLIS, Aug. 20, 2003 — NRG Energy Inc.’s affiliate, NRG McClain LLC, has reached an agreement to sell its 77 percent interest in the McClain Generating Station to Oklahoma Gas & Electric Co., a subsidiary of Oklahoma City-based OGE Energy Corp.
As part of the sales process, the project company NRG McClain LLC, filed for protection under Chapter 11 of the U.S. Bankruptcy Code.
McClain is a 520-megawatt combined-cycle, natural gas-fired facility located in Newcastle, Oklahoma, just south of Oklahoma City in McClain County. The Oklahoma Municipal Power Authority owns the remaining 23 percent interest in the facility.
“We are using the voluntary Chapter 11 process as a tool to effectuate the transaction and NRG McClain will continue to operate in the ordinary course of business,” said John Boken, Interim President and Chief Operating Officer. “The expected sale of this asset is a positive step in NRG’s overall restructuring efforts and is consistent with our business plan to divest selected noncore assets.”
The total price to be paid by Oklahoma Gas & Electric for the facility will be approximately $160 million, subject to certain customary closing adjustments. Proceeds from the sale will be used to pay down project debt and cover deferred project operating costs. NRG anticipates that the proposed sale, which is subject to Bankruptcy Court approval, will be completed by early December 2003.
NRG McClain LLC filed its voluntary petition in U.S. Bankruptcy Court in the Southern District of New York. In conjunction with the Chapter 11 filing, and as required under Section 363 of the Bankruptcy Code, NRG will file a motion seeking to establish bidding procedures for an auction that will allow other qualified bidders to submit higher and better offers to purchase NRG McClain.
NRG Energy, Inc. owns and operates a diverse portfolio of power-generating facilities located primarily in the United States. Its operations include competitive energy production and cogeneration facilities, thermal energy production and energy resource recovery facilities.