Dominion, Mirant Agree to Sale of State Line
Ventures Inc., Power Station
$182 Million Acquisition Expands Dominion's
Footprint In Key Generation Market
RICHMOND, Va. – Dominion (NYSE: D) and Mirant (NYSE: MIR)
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-megawatt 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. Its 22,000-megawatt generation portfolio
is expected to grow to more than 26,000 megawatts by 2005. In addition to its
more than 4.9 trillion cubic feet equivalent of natural gas reserves and more
than 450 billion cubic feet equivalent of annual production, Dominion also owns
and operates 7,600 miles of natural gas transmission pipeline with a delivery
capability of 6.3 billion cubic feet per day. The company also operates the
nation's largest underground natural gas storage system with more than 950 billion
cubic feet of storage capacity. Dominion serves nearly 4 million retail natural
gas and electric customers in five states, and owns a managing equity interest
in Dominion Fiber Ventures LLC. For more information about Dominion, visit the
company's Web site at www.dom.com.
Mirant is a leading global competitive-energy company. The
company delivers value by integrating an extensive portfolio of power and natural
gas assets with marketing and risk management expertise. Mirant has facilities
in North America, the Caribbean, Europe and Asia, and operates one of the world's
largest energy commodity trading organizations from its headquarters in Atlanta.
For more information, visit the company's Web site at www.mirant.com.
