Peoples Energy (NYSE:PGL)
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From Dec 2019 to Dec 2024
Peoples Energy (NYSE:PGL) today announced that it has
finalized an agreement with Exelon Generation (NYSE:EXC) to sell its
approximate thirty percent interest in the Southeast Chicago Energy
Project (SCEP) for $50 million, subject to certain closing
adjustments.
SCEP is a 350-megawatt, natural gas-fired "peaker" electric power
plant located on Chicago's southeast side. It began operation as a
joint venture between Peoples Energy and Exelon in the summer of 2002.
The purchase by Exelon requires Federal Energy Regulatory Commission
(FERC) approval, which is expected this summer. The closing will take
place shortly after receipt of FERC approval, at which time the
Company expects to record a slight gain on the sale in line with
expectations. Cash proceeds will be used to reduce short-term
borrowing at Peoples Energy Corporation. Peoples Energy will remain as
fuel supplier to the plant.
"While our power investments have provided solid earnings and cash
flow, the power market has changed dramatically over the past several
years and we are not well positioned to compete in that market
long-term," said Thomas M. Patrick, chairman, president and CEO,
Peoples Energy. "The sale of power assets allows us to narrow our
focus to three primary lines of business -- gas distribution, oil and
gas production and energy marketing."
SCEP currently sells 100% of its output to Exelon Generation under
an existing long-term power purchase agreement. Neither the Power
Purchase Agreement nor the operations will be impacted by the
transaction.
This sale will be the first transaction following the Company's
announcement of its intent to divest its power assets. Pending final
negotiations, due diligence and regulatory approvals, the Company
expects to close on the sales of its remaining power assets, Elwood
Energy and a development site in Oregon, at a sizable gain, later in
fiscal 2006.
Peoples Energy, a member of the S&P 500, is a diversified energy
company comprised of three primary business segments: Gas Delivery,
Oil and Gas Production and Energy Marketing. The Gas Delivery business
serves about one million retail customers in Chicago and northeastern
Illinois. Visit the Peoples Energy web site at PeoplesEnergy.com.
Forward-Looking Information.
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, such as the expected gain on
the company's sale of its interest in Southeast Chicago Energy
Project. Generally, the words "may", "could", "project", "believe",
"anticipate", "estimate", "plan", "forecast", "will be", and similar
words identify forward-looking statements. Actual results could differ
materially from such expectations because of many uncertainties,
including, but not limited to, the timing of the closing of the sales
transactions, approval of the transactions by governmental agencies,
effectiveness of the Company's risk management policies and the
creditworthiness of customers and counterparties; regulatory
developments in the United States, Illinois and other states where the
Company does business; changes in the nature of the Company's
competition resulting from industry consolidation, legislative change,
regulatory change and other factors, as well as action taken by
particular competitors; operational factors affecting the Company's
gas distribution, power generation and oil and gas production
segments; Aquila Inc.'s financial ability to perform under its power
sales agreements with Elwood Energy LLC; weather related energy
demand; and terrorist activities. Some of the uncertainties that may
affect future results are discussed in more detail in Peoples Energy's
most recent Form 10-K filed with the SEC under Item 1 - Business and
Item 7 - Management's Discussion and Analysis, as such information may
be updated by subsequent filings under the Securities Exchange Act of
1934. All forward-looking statements included in this press release
are based upon information presently available, and Peoples Energy
assumes no obligation to update any forward-looking statements.