FirstEnergy Generation (FG) has agreed to sell its 545MW West Lorain Facility and related assets in Ohio, to Vermillion Power, a subsidiary of Starwood Energy Group (Starwood).
Image: FirstEnergy Generation to sell 545MW West Lorain facility to Starwood Energy. Photo: courtesy of dlritter/Freeimages.com.
Starwood Energy stated that the West Lorain Facility is a periodic-start, combustion-turbine generation station located on 500 acres in Lorain, Ohio near Lake Erie.
The transaction amount includes $144m in cash plus customary closing adjustments.
The facility was constructed in 1973 as a combined-cycle electric generating system with two combustion turbines, two heat recovery steam generators and a steam turbine generator.
Five additional combustion turbines were installed and placed in operation in 2001. Presently, the plant can operate on fuel oil, but is also capable of operating on natural gas.
The sale will be completed pursuant to a court-supervised bankruptcy auction process in order to maximize the value of the assets being sold.
FG has filed a motion with the Bankruptcy Court overseeing its chapter 11 cases for approval of auction and bid procedures that will permit other interested parties to submit competitive bids for the West Lorain Facility and related assets.
If FG receives no higher or better bids, Starwood will acquire the business, subject to the satisfaction of customary conditions to closing.
The sale is subject to receiving customary approvals, including approval from the Federal Energy Regulatory Commission and Hart-Scott-Rodino. Once approved, the companies expect to close the transaction in the first half of next year.
On 31 March this year, FirstEnergy Solutions (FES), its subsidiaries including FG and FirstEnergy Nuclear Operating filed petitions under Chapter 11 of the Federal Bankruptcy Code to facilitate an orderly financial restructuring. The case is proceeding in U.S. Bankruptcy Court for the Northern District of Ohio, in Akron.
Last month, Starwood Energy Group Global completed the sale of its 50% interest in the ~1.2GW generation portfolio known as Compass Power to JERA, which is a joint venture of Japanese power companies, TEPCO and Chubu Electric.
Compass Power includes 840MW Marcus Hook Energy Center, the 173MW Dighton facility and the 202MW Milford facility.
The company acquired Marcus Hook in 2016 and Milford and Dighton last year.