Dominion Agrees To Acquire Wisconsin
Nuclear Facility
RICHMOND, Va. - Dominion (NYSE: D), one of the
nation's largest energy producers, announced today that it has reached an agreement
with Wisconsin Public Service Corporation, a subsidiary of WPS Resources Corporation
(NYSE: WPS), and Wisconsin Power & Light Company (WP&L), a subsidiary
of Alliant Energy Corporation (NYSE: LNT), to purchase the Kewaunee Power Plant
in northeastern Wisconsin.
Under terms of the agreement, Dominion will pay
$220 million in cash for the 545-megawatt single-unit station, which is located
on Lake Michigan about 35 miles southeast of Green Bay. The purchase price includes
about $36.5 million for nuclear fuel. In addition, Wisconsin Public Service
and WP&L will transfer about $392 million of decommissioning funds to Dominion
for eventual decommissioning of the facility.
Wisconsin Public Service owns 59 percent of the
Kewaunee facility, and WP&L owns the remaining 41 percent. Dominion will
sell 100 percent of the facility's output—59 percent to Wisconsin Public
Service and 41 percent to Wisconsin Power & Light—under a power purchase
agreement that expires in 2013.
Dominion expects the acquisition to be immediately
accretive to earnings per share upon closing.
The transaction is expected to close in the fall
of 2004. Regulatory approvals are required by the U.S. Nuclear Regulatory Commission,
the Federal Energy Regulatory Commission and the public utility commissions
of Wisconsin, Illinois, Iowa, Michigan and Minnesota, the states in which the
co-owners of the station provide electric service. Approval is also required
under the Hart-Scott-Rodino Act.
Thos. E. Capps, chairman, president and chief
executive officer of Dominion, said:
"This addition will expand our generation
portfolio in the growing Midwest, Mid-Atlantic and Northeast quadrant of the
U.S.—what we call 'MAIN-to-Maine'. Stand alone, the MAIN-to-Maine region
represents the world's third largest economy, and serving customers there remains
our core goal.
"By adding new nuclear capacity already
under a power sales contract, we're capitalizing on our strong nuclear operating
experience and broadening the fuel diversity of our power generation fleet.
We're also strengthening our ability to deliver critical base-load generation
into the MAIN-to-Maine economy.
"Our next step is to close the deal and
welcome Kewaunee's dedicated and professional workforce and to help them integrate
into the Dominion system. They have a solid and reliable operating track record."
The Kewaunee facility, located in the town of
Carlton, employs about 460 professionals, including 150 members of the International
Association of Operating Engineers AFL/CIO. Dominion does not intend to reduce
the existing workforce. "We believe the current size of the staff is appropriate,"
Capps said.
The Kewaunee station consists of one 545-megawatt,
two-loop Westinghouse pressurized water reactor. The station began commercial
service in 1974 and is operated by Nuclear Management Co., which manages operations
at six nuclear units in Iowa, Minnesota, Michigan and Wisconsin. The facility
is licensed to operate through the end of 2013.
Upon completion of the transaction, Kewaunee
will be operated by Dominion Energy, an operating unit of Dominion. Dominion
Energy currently operates the North Anna and Surry nuclear power stations in
Virginia and the Millstone nuclear power station in Connecticut.
North Anna Power Station in Louisa County consists
of two three-loop Westinghouse reactors capable of producing 1,842 megawatts.
Surry Power Station in Surry County consists of two three-loop Westinghouse
reactors capable of producing 1,625 megawatts of electricity. The Millstone
Power Station in Waterford, Conn., consists of two operating reactors. Millstone
Unit 2 is an 870-megawatt Combustion Engineering pressurized water reactor.
Millstone Unit 3 is a four-loop Westinghouse reactor capable of generating 1,150
megawatts of electricity.
Dominion is a leader in the safe and efficient
operation of nuclear power stations. North Anna and Surry have consistently
ranked among the lowest-cost producers of nuclear-generated electricity in the
United States, according to Platts, an independent information and database
owned by the McGraw-Hill Companies.
Dominion, headquartered in Richmond, Va., is
one of the nation's largest producers of energy, with an energy portfolio of
more than 24,000 megawatts of generation, 6.2 trillion cubic feet equivalent
of proved natural gas reserves and 7,900 miles of natural gas transmission pipeline.
Dominion also operates the nation's largest underground natural gas storage
system with more than 960 billion cubic feet of storage capacity and serves
5.3 million retail energy customers in nine states. For more information about
Dominion, visit the company's Web site at www.dom.com.
Wisconsin
Public Service, a subsidiary of WPS
Resources Corp. (NYSE: WPS) of Green Bay, Wis., serves 400,000 electric
customers in central Wisconsin and upper Michigan. Alliant
Energy Corp. (NYSE: LNT), headquartered in Madison, Wis., serves 1.4 million
electric customers in Iowa, Illinois, Minnesota and Wisconsin.
This release contains forward-looking statements
including our expectations for future earnings and for the expectation that
the Kewaunee acquisition will be immediately accretive to earnings that are
subject to various risks and uncertainties. Discussion of factors that could
cause actual results to differ materially from management's projections, forecasts,
estimates and expectations may include factors that are beyond the company's
ability to control or estimate precisely, such as risks inherent in the operation
of nuclear facilities, estimates of future market conditions, estimates of proved
and unproved reserves and the behavior of other market participants. Other factors
include, but are not limited to, weather conditions, fluctuations in energy-related
commodity prices, changes to rating agency requirements and ratings, capital
market conditions, changing financial accounting standards, trading counter-party
credit risks, risks related to energy trading and marketing, costs associated
with successfully executing the company's exit from the telecommunications business,
and other uncertainties. Other risk factors are detailed from time to time in
the company's Securities & Exchange Commission filings.
