DOW JONES NEWSWIRES 
 

PPL Corp. (PPL) agreed to sell its Long Island generation business to J-Power USA Development Co., a unit of Tokyo-based Electric Power Development Co. (9513.TO), for about $135 million plus working capital.

The sale, expected to close later this year, will reduce second-quarter earnings by 9 cents to 12 cents a share, but boost cash flow and modestly add to earnings thereafter, said PPL Chief Operating Officer William H. Spence. The company left its 2009 earnings forecast unchanged.

Analysts were expecting a second-quarter profit of 40 cents, according to a survey by Thomson Reuters.

The two plants, which are each 79.9-megawatt facilities, sell their output to the Long Island Power Authority.

"These have been good assets for us but are not core to our concentrated generation positions in the PJM Interconnection and in the Northwest," said Spence. The company has sold numerous assets in recent years.

J-Power has continued to grow its U.S. presence. A company executive told Bloomberg News Wednesday J-Power was in talks to purchase part or all of three natural-gas-fired power plants on the East Coast. He declined to name the facilities in question.

The sale comes as Pennsylvania-based PPL, which serves 4 million customers in that state and the U.K., tries to cope with reduced power demand because of the recession and falling electricity prices, which are forcing power providers to cut spending.

Two weeks ago, Moody's Investors Service lowered its ratings outlook on PPL and various units to negative, citing concerns about electric-market rates and increased capital spending on infrastructure. The reduced view followed PPL's posting of a 7.3% drop in first-quarter earnings amid lower wholesale margins in the U.S.

Shares were recently up 0.6% at $32.53.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com