Edmonton, Alberta, April 7, 2006 — EPCOR Utilities Inc. (EPCOR) announced that it has agreed to sell to EPCOR Power L.P. and its wholly owned subsidiaries (the “partnership”) a 100% interest in Frederickson Power L.P. (FPLP) for an aggregate purchase price of $118 million.
FPLP owns a 50.15% interest in the Frederickson power facility, a 249 megawatt (MW) (nominal) single unit, natural gas-fired combined cycle generating facility, with an additional duct firing capability of 20 MW, located in Pierce County, Washington.
FPLP’s portion (50.15%, or approximately 125 MW) of the Frederickson power facility’s base 249 MW generating capacity has been sold under power purchase agreements (PPAs) expiring in 2022 to three Washington public utility districts.
In addition, at the closing of the acquisition, EPCOR will grant to the partnership an option to acquire a 49% interest in the development rights for a second generating unit adjacent to the Frederickson facility site, exercisable for six months after the closing of the acquisition at an exercise price of U.S. $4.0 million.
There will be no change to the remaining interest in the Frederickson power facility, which is held by Puget Sound Energy (PSE). PSE holds its share of the facility’s capacity (49.85%, or approximately 124 MW) through its ownership of a 49.85% undivided interest in the Frederickson power facility. PSE uses its share of such capacity to serve its retail customers. Plant dispatch is coordinated with FPLP and PSE through a dispatch amendment agreement to the PPAs.
EPCOR will continue to operate the Frederickson power facility.
EPCOR owns approximately 30.6% of the partnership’s outstanding units. EPCOR has agreed to purchase 752,760 subscription receipts of an issue of subscription receipts being offered for sale by a syndicate of underwriters co-led by BMO Nesbitt Burns Inc. and TD Securities Inc. under an agreement with the partnership. Following closing of the sale, EPCOR will own approximately 30.6% of the partnership’s outstanding units.