Dominion Resources Agrees to Sale of Latin
American Businesses to Duke Energy International
RICHMOND, Va. -- Dominion Resources Inc. (NYSE: D) announced
today that it has agreed to sell its portfolio of Latin American power generation
businesses to Duke Energy International for $405 million.
The businesses being sold total about 1,200 megawatts of
gross generation capacity with hydroelectric, natural gas and diesel fuel sources.
They are in Argentina, Belize, Bolivia and Peru.
The transaction is expected to be completed by the end of
the year following government consents and approvals and financial closings.
Thos. E. Capps, chairman, president and chief executive officer
of Dominion Resources, said the company is exiting its Latin American generation
businesses to direct future growth in emerging competitive energy markets of
the Midwest-Northeast region of the United States.
When Dominion Resources’ planned merger with Consolidated
Natural Gas Company (NYSE: CNG) is completed, the combined entity will operate
in that region as the nation’s largest fully-integrated natural gas and electric
power company. The combined company will begin operations with 4 million retail
customers, the nation’s largest gas storage capability, and major gas and power
production facilities. In February, the two companies announced plans to merge.
The merger is expected to close by year end.
Capps said the newly merged company’s competitive capability
will be even further enhanced by nearly a decade of competitive experience in
Latin American markets.
"In Latin America, we learned up close, first hand and
in person how to run profitable generation businesses in competitive power markets
that have been operating for many years," Capps said. "We delivered
consistent profits to our shareholders and reliable, efficient supply to our
customers. We are exiting Latin America with a broader worldview, a better understanding
of the true nature of competitive energy markets, and an eagerness to put these
lessons to use at home.
"Our Latin American working team is the best in the
business. We are pleased that we are able to transfer ownership of their businesses
to another excellent energy company. Duke has the reputation, the operating
skill, the ongoing commitment to growth in Latin America and the financial strength
to sustain growth and superior operating performance at each of our businesses
there. From our perspective, we are planning to focus our energies and capital
resources in the Midwest-to-Northeast region of the U.S., which consumes 40
percent of the nation’s energy and represents a market with strong potential
for profit.
"To our employees, to our fellow shareholders, to the
forward-looking governments of Argentina, Belize, Bolivia and Peru, and to Duke
Energy, we convey our best wishes for continued success."
Capps said proceeds from the sale will be used primarily
to buy back Dominion Resources’ stock.
While Dominion Resources owns portions of each business being
sold, it has acted as the controlling operator at all. The interests being sold
are:
Argentina 54 percent of the 98-megwatt, natural gas-fired Alto Valle power station.
Co-owners of the business are the station’s employees, with a 10 percent interest,
and CALF, a local electric utility cooperative, with a 36 percent interest.98
percent of the 450-megawatt Cerros Colorados hydroelectric station. Co-owners
of the business are the facility’s employees, with a 2 percent interest.
Belize 95 percent of the 25-megawatt Mollejon hydroelectric facility. The remaining
5 percent of the business is owned by the Social Security Administration of
Belize.
Bolivia 50-percent interest in the 126-megawatt Empresa Electrica Corani hydroelectric
business. Forty seven percent of the business is held in two private pension
accounts for the people of Bolivia, and the balance is held by individual shareholders,
including employees.
Peru 30 percent ownership in a power business serving northern Peru principally
through hydroelectric power, with some diesel generation capacity. The business
will have 520 megawatts of capacity when an expansion program is completed later
this year. Co-owners include Gener, a Chilean electric generation company, with
a 30 percent interest, Electroperu with a 30 percent interest, and a 10 percent
interest held by more than 700 public shareholders.
Dominion Resources, headquartered in Richmond, Va., is an
$18 billion holding company active in electric power generation, transmission,
and distribution and in natural gas exploration and production. Consolidated
Natural Gas, headquartered in Pittsburgh, is one of the nation’s largest producers,
transporters, distributors and retail marketers of natural gas.
Duke Energy International is a subsidiary of Duke Energy
(NYSE: DUK).
