Electric utility company Aquila (ILA) said Friday that it will pay $218 million to a subsidiary of Constellation Energy (CEG) to assume the ownership of its Elwood tolling contracts, which had obligated the company to purchase power from the Illinois plant.
The contract obligations extend through August 2017 and this transaction eliminates around $405 million in fixed financial obligations. The $218 million payment will be a pretax charge to its earnings, Kansas City, Mo.-based Aquila said.
The Elwood tolling contracts, entered into in 2000, obligated Aquila to purchase around 600 MW of the generating capacity from the 1400 MW Elwood plant.
The company's shares were down 3 cents at $4.13 in recent trading Friday.