$182 million acquisition expands Dominion’s footprint in key generation market
RICHMOND, Va., Feb. 26, 2002 — Dominion and Mirant announced Tuesday that they have reached an agreement under which Dominion will purchase Mirant State Line Ventures Inc., whose assets include the State Line power station, a 515-MW coal-fired generation facility outside Hammond, Ind., near the Indiana-Illinois border.
Under terms of the agreement, Dominion will pay about $182 million to acquire 100 percent ownership of Mirant State Line Ventures. Dominion expects the acquisition to be immediately accretive to earnings.
Dominion will also assume a power purchase agreement with Exelon, the sole purchaser of the station’s output. The agreement expires in 2012.
The transaction is expected to close during the second quarter. The deal is subject to approval by the Federal Energy Regulatory Commission and approval under the Hart-Scott-Rodino Act.
Thos. E. Capps, chairman, president and chief executive officer of Dominion, said:
“Today’s transaction represents an excellent opportunity for Dominion to significantly expand its generation fleet in the heart of our geographic area of focus. At the same time, it contributes additional fuel mix diversity both to Dominion’s existing generation assets and to our new development projects.
“State Line is a well-run plant with excellent operating fundamentals and a committed, experienced workforce. Our own track record of operating profitable coal-fired facilities — including the nearby Kincaid Power Station — brings additional value to the transaction.
“This acquisition broadens our platform of energy assets serving the Midwest, Northeast and Mid-Atlantic, home to 40 percent of the nation’s energy consumption. State Line’s 515 megawatts of generation capacity will help meet the region’s demand loads efficiently, safely and cleanly.
“The addition of our 13th coal-fired power station also makes use of an abundant natural resource that is an integral source of energy for the region. It complements our natural gas-fired facilities currently in operation and under development.”
Dominion’s acquisition includes State Line’s 197-megawatt Unit 3 and 318- megawatt Unit 4, both coal-fired units. The two units burn low-sulfur coal from the Powder River Basin in Wyoming. Exelon will continue to provide 100 percent of the coal for the units and transportation under terms of the power purchase agreement.
Dominion acquired State Line’s sister facility, the 1,108-megawatt coal- fired Kincaid Power Station near Springfield, Ill., from Exelon in 1998. Dominion operates 11 other coal-fired generation facilities in Virginia and West Virginia.
Dominion, headquartered in Richmond, Va., is one of the nation’s largest producers of energy, with a production capability of more than 3 trillion British thermal unit of energy per day. For more information about Dominion, visit the company’s Web site at http://www.dom.com .
Mirant is a global competitive-energy company which integrates a portfolio of power and natural gas assets with marketing and risk management expertise. For more information, visit the company’s Web site at http://www.mirant.com .