SAN DIEGO, Dec. 26, 2012 /PRNewswire/ -- Sempra U.S. Gas & Power today announced it has entered into a definitive agreement to sell one 625-megawatt (MW) block of its 1,250 MW Mesquite Power natural gas-fired power plant to the Salt River Project (SRP) Agricultural Improvement and Power District for $371 million.
The SRP Board of Directors approved a management proposal to acquire 100 percent ownership of the 625 MW block and a 50-percent undivided interest in the infrastructure facilities shared by the two blocks at their November meeting. The agreement is subject to approvals from the Federal Energy Regulatory Commission and other regulatory agencies. The companies anticipate receiving these approvals in the first quarter of 2013.
"This strategic sale comes at the right time for Sempra U.S. Gas and Power as we continue to reduce our exposure to the merchant power markets, while also allowing us to put greater emphasis on growing our southeast natural gas portfolio," said Jeffrey W. Martin, president and CEO of Sempra U.S. Gas & Power. "This transaction will enable us to redeploy capital to expand our growing presence in the natural gas sector."
"We studied the market very carefully and determined that this purchase would provide an economic benefit to SRP and its customers," said SRP general manager Mark Bonsall. "Load growth is relatively small right now, but when it returns, this plant will position us well in the long term to meet our customers' needs at a reasonable cost."SRP, which is the largest supplier of raw water to the greater- Phoenix metropolitan area, has acquired one of Mesquite Power's two 625 MW power blocks. Each block is comprised of two gas turbines and a steam turbine. As part of the transaction, SRP also will become the operator of both Mesquite units. Mesquite Power, which has been in operation since 2003 in Arlington, Ariz., is among the nation's cleanest and most efficient gas-fired power plants. It was the first power plant in Arizona to receive the Voluntary Protection Programs' award, the highest recognition for exemplary safety performance, in 2009. The plant recently was awarded Voluntary Protection Programs recertification for 2012 to 2015. About Salt River Project Agricultural Improvement and Power District SRP is the largest provider of electricity to the greater Phoenix area, serving more than 950,000 electric customers. About Sempra U.S. Gas & Power Sempra U.S. Gas & Power, LLC is a leading developer of renewable energy and natural gas solutions. The company operates solar, wind and natural gas power plants that generate enough electricity for nearly 1 million homes, along with natural gas storage and pipelines and distribution utilities. Sempra U.S. Gas & Power is a subsidiary of Sempra Energy (NYSE: SRE), a Fortune 500 energy services holding company with 2011 revenues of $10 billion. The Sempra Energy companies' nearly 17,500 employees serve about 31 million consumers worldwide. For more information, visit www.SempraUSGP.com. (Logo: http://photos.prnewswire.com/prnh/20110108/SEMPRAENERGYLOGO) This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by words like "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "will," "would," "could," "should," "potential," "target," "outlook," "depends," "pursue" or similar expressions, or discussions of guidance, strategies, plans, goals, initiatives, objectives or intentions. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements. Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions and the timing of actions by the California Public Utilities Commission, California State Legislature, Federal Energy Regulatory Commission, U.S. Department of Energy, Nuclear Regulatory Commission, California Energy Commission, California Air Resources Board, and other regulatory, governmental and environmental bodies in the United States and other countries where the company does business; capital market conditions, including the availability of credit and the liquidity of investments; inflation, interest and exchange rates; the impact of benchmark interest rates, generally the U.S. Treasury bond and Moody's A-rated utility bond yields, on the California utilities' cost of capital; the timing and success of business development efforts and construction, maintenance and capital projects, including risks inherent in the ability to obtain, and the timing of the granting of, permits, licenses, certificates and other authorizations; energy markets, including the timing and extent of changes and volatility in commodity prices; the availability of electric power, natural gas and liquefied natural gas, including disruptions caused by failures in the North American transmission grid, pipeline explosions and equipment failures; weather conditions, natural disasters, catastrophic accidents, and conservation efforts; risks inherent in nuclear power generation and radioactive materials storage, including catastrophic release of such materials, the disallowance of the recovery of the investment in, or operating costs of, the generation facility due to an extended outage, and increased regulatory oversight; risks posed by decisions and actions of third parties who control the operations of investments in which the company does not have a controlling interest; wars, terrorist attacks and cyber security threats; business, regulatory, environmental and legal decisions and requirements; expropriation of assets by foreign governments and title and other property disputes; the status of deregulation of retail natural gas and electricity delivery; the inability or determination not to enter into long-term supply and sales agreements or long-term firm capacity agreements; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the company. These risks and uncertainties are further discussed in the reports that Sempra Energy has filed with the Securities and Exchange Commission. These reports are available through the EDGAR system free-of-charge on the SEC's website, www.sec.gov , and on the company's website at www.sempra.com . These forward-looking statements speak only as of the date hereof, and the company undertakes no obligation to update or revise these forecasts or projections or other forward-looking statements, whether as a result of new information, future events or otherwise. Sempra International, LLC, and Sempra U.S. Gas & Power, LLC, are not the same companies as San Diego Gas & Electric (SDG&E) or Southern California Gas Company (SoCalGas) and Sempra International, LLC and Sempra U.S. Gas & Power, LLC are not regulated by the California Public Utilities Commission. Sempra International's underlying entities include Sempra Mexico and Sempra South American Utilities. Sempra U.S. Gas & Power's underlying entities include Sempra Renewables and Sempra Natural Gas. SOURCE Sempra U.S. Gas & Power
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