Novi, MI, Jan. 19, 2007 — ITC Holdings Corp. announced that its newly formed subsidiary, ITC Midwest LLC, has signed a definitive agreement to acquire the transmission assets of Interstate Power and Light Co. (IP&L), an Alliant Energy Corp. subsidiary, in a transaction valued at approximately $750 million.
IP&L’s transmission assets currently consist of approximately 6,800 miles of transmission lines at voltages of 34.5kV and above and approximately 170 substations, predominantly located in Iowa with some assets in Minnesota and Illinois. ITC Holdings expects to finance the transaction through a combination of cash on hand and equity and debt financings.
ITC Holdings hopes the acquisition will allow them to help rebuild and strengthen the transmission grid in Iowa, Minnesota and Illinois, create a more competitive energy market, and help support the growing region’s increasing electricity demand.
In conjunction with the sale of IP&L’s transmission assets, Alliant Energy also announced an overall plan entitled “Energy for a New Generation” that includes the construction of a new baseload clean-coal generation plant and development of renewable wind energy in Iowa.
Since becoming an independent electric transmission company, ITC Holdings has grown from 38 employees to over 230 employees and 400 highly-skilled contract field staff to support its effort to improve electric transmission infrastructure. ITC Holdings anticipates the creation of approximately 100 new jobs in Iowa and Michigan to support its continued growth, with up to an additional 200 contract field jobs in Iowa, Minnesota and Illinois in conjunction with anticipated capital and maintenance work on the system. Through its operating subsidiaries, ITC Holdings has invested more than $460 million in transmission property, plant and equipment and maintenance targeted at improving electric reliability, reducing system congestion and lowering the overall cost of delivered energy in Michigan.
The transaction is subject to customary closing conditions and regulatory approvals, including approval from the Federal Energy Regulatory Commission, the Iowa Utilities Board, the Minnesota Public Utilities Commission and the Illinois Commerce Commission as well as an antitrust review under the Hart-Scott-Rodino Act. The approval of ITC Holdings’ shareholders is not required. ITC Holdings expects the transaction to close in the fourth quarter of 2007.
In connection with the transaction, Lehman Brothers acted as financial advisor to ITC Holdings, Simpson Thacher & Bartlett LLP served as its legal counsel, Stuntz, Davis & Staffier, PC served as legal counsel regarding FERC matters and Brown, Winick, Graves, Gross, Baskerville, & Schoenebaum P.L.C. served as legal counsel regarding Iowa law matters.
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