PPL Corporation’s competitive generation subsidiary, PPL Generation, LLC has agreed to acquire AES Prescott, L.L.C. and AES Ironwood, L.L.C. from a subsidiary of The AES Corporation. Together they own and operate the AES Ironwood 705-megawatt combined-cycle natural gas-fired power plant in Lebanon, Pennsylvania.
The total consideration for the acquisition is estimated at USD304 million – a cash purchase price of USD87 million which includes USD4.8 million in expected working capital and about USD217 million of net project indebtedness of AES Ironwood, L.L.C.
PPL EnergyPlus, LLC, PPL’s marketing and trading subsidiary has supplied natural gas for the operation of the plant for the past four years, in return for securing its full output under a tolling agreement expiring in 2021.
Expected to close in the second quarter of this year following the receipt of necessary third-party consents and regulatory approvals, the acquisition is not expected to have a material impact on PPL’s financing plans or earnings. The plant has been in operation since 2001