Chicago, IL, Jan. 18, 2007 — Peoples Energy Corp. announced that it has completed the sale of its fifty percent interest in Elwood Energy LLC to J-Power USA Development Co. (J-Power). Peoples Energy expects to close on the sale of its remaining power asset, a development site in Oregon, to J-Power within the near future.
As a result of these transactions, Peoples Energy expects to record a net gain of approximately $20 million on a pre-tax basis in the quarterly period ended March 31, 2007. Cash proceeds of approximately $110 million, which include approximately $6 million of cash distributions received by the company from the Elwood partnership since agreement was reached with J-Power on the sales in 2006, will be used to reduce short-term borrowing at Peoples Energy Corp.
The Company will temporarily retain a 0.1% interest in the Elwood partnership, but expects to transfer the remaining Elwood interest to J-Power within 18 months.
The sale of Elwood follows an announcement by Peoples Energy in February ’06 of its intent to divest its power assets and exit the power generation business. The company’s interest in the Southeast Chicago Energy Project (SCEP) was sold to Exelon Generation in May, 2006, for approximately $50 million. The company recognized a $4.1 million pre-tax gain as a result of that sale.
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