Transaction will result in an after-tax charge of $180 million, or about $0.74 per share, and will be reflected as a charge to discontinued operations in the second quarter of 2005.Newark’s Public Service Enterprise Group (NYSE: PEG) (PSEG) said Friday its PSEG Power subsidiary will sell an 821-megawatt electric generating plant in Ohio to a subsidiary of Ohio’s American Electric Power (NYSE: AEP) for $220 million.
Located in Waterford, Ohio, the gas-fired combined-cycle plant entered commercial operation in 2003. PSEG plans to use proceeds from the sale to retire debt.
In a press release, PSEG said the transaction will result in an after-tax charge of $180 million, or about $0.74 per share, and will be reflected as a charge to discontinued operations in the second quarter of 2005. The company said the charge will not affect its guidance for 2005 earnings from continuing operations of $3.15 per share to $3.35 per share.
PSEG said the sale, which it expects to close in the third quarter, is projected to add to earnings from continuing operations in 2006.
PSEG is a diversified energy holding company with annual revenues of more than $10 billion. PSEG Power, one of the largest independent power producers in the U.S., owns approximately 14,000 MW of electric generating capacity. PSEG’s other primary subsidiaries are Public Service Electric and Gas (PSE&G), New Jersey’s oldest and largest energy distribution utility company, and PSEG Energy Holdings, a holding company for other nonregulated businesses.
The company agreed in December to be acquired by Illinois-based Exelon (NYSE: EXC). In announcing the sale of the Ohio power plant, the company said it now expects costs associated with the proposed merger to reduce 2005 results by as much as $0.10 per share.
At the close of trading, PSEG shares were down $0.07 to $55.45.