FirstEnergy looks to sell merchant gas, hydro generation in $900M deal
FirstEnergy is moving ahead with a plant to divest struggling power plants, informing regulators that AE Supply has entered into a non-binding letter of intent with an exclusivity provision to sell its Springdale, Chambersburg, Gans and Hunlock gas facilities, along with the company’s interest in the Bath hydroelectric facility.
According to the 8-K, FirstEnergy expects a purchase price for the assets of $885 million, including more than $300 million in debt that would be assumed by the buyer. FirstEnergy also revealed it had secured a new $6.9 billion credit facility, replacing $7.2 billion in debt set to expire in the first quarter of 2019, according to SNL.
In its filing, the company also said it continues to explore “all alternatives for the remaining generation assets at (FirstEnergy Supply) and AE Supply, including, but not limited to, legislative efforts to convert generation from competitive operations to a regulated or regulated-like construct.”
In November, FirstEnergy said it would work with American Electric Power’s Ohio utility to push for the state’s power markets to be re-regulated. The two utilities previously won support from state regulators for struggling coal and nuclear generation, but federal regulators subsequently blocked the deals, leading to talk of plant sales and re-regulation.