The proposed transaction is expected to be consummated through a court-approved bankruptcy proceeding to be initiated by Boston Generating. If approved, Constellation’s bid will then be considered the price to be beat in an asset auction to be held later this year.
If Constellation is ultimately the successful acquirer, under terms of the agreement, it will acquire Boston Generating’s five power plants located in the Boston area: four natural gas-fired plants, including Mystic 8 and 9 (1,580MW), Fore River (787MW), Mystic 7 (574MW); and a fuel oil plant, Mystic Jet (9MW).
Mayo Shattuck III, chairman, president and CEO of Constellation, said: “This agreement is consistent with Constellation Energy’s previously stated intention to purchase physical generation assets in regions where we have significant load obligations.
“These assets would expand our physical generation fleet with a portion of the total output further improving our net load to generation ratio to approximately 55%.”
Based on the current bid price, Constellation expects this transaction to be accretive to earnings beginning in 2011. The company plans to finance this transaction through a mix of available cash on hand and debt.
