June 10, 2008
Dynegy and LS Power Group to Sell Interest in Sandy Creek Facility to LCRA
Energy services provider Dynegy and the LS Power Group have announced an agreement to sell a portion of their indirect interest in the 900MW Sandy Creek power generation facility to the Lower Colorado River Authority.
In addition to purchasing an 11% non-controlling ownership stake in the project, which represents the equivalent of 100MW, Lower Colorado River Authority (LCRA) is also entering into a 30-year power purchase agreement (PPA) for 100MW of capacity commencing with commercial operations. The PPA provides for a pass-through of fixed and variable operating costs.The proceeds from the sale will be used to repay project costs and to fund a distribution to Dynegy and LS Power. In addition, Dynegy's credit support requirements related to the Sandy Creek project will be reduced by approximately $50 million.
Sandy Creek is expected to enter into commercial operation in 2012. The facility, which is under construction, will include a super-critical steam generator and advanced emission controls, including low-nitrous oxide burners, a selective catalytic reduction system, scrubbers and a continuous emissions monitoring system.
Due to the facility's high efficiency-low heat rate design, it is expected to be well-positioned for frequent dispatch and energy sales into the Electric Reliability Council of Texas.
Through Sandy Creek Holdings, Dynegy and the LS Power Group will retain an ownership interest in the Sandy Creek project of approximately 64% following completion of the LCRA transaction.