- Dominion Energy announced Monday it has reached an agreement to sell its stakes in three merchant power plants in two transactions, totaling 1,900 MW of capacity spread across the U.S. Northeast and Southeast.
- The deals include the sale of two gas plants and a share of hydro production, for more than $1.3 billion. Total proceeds had been expected to range from $1 billion to $1.5 billion when the possible sale was announced this summer.
- Despite the decision to sell two gas plants, Dominion retains a strong commitment to the resource for its future generating portfolio.
Dominion wants to improve its balance sheet and, like other companies with fossil fuel interests, reduce some of its exposure to power markets.
The utility will sell its 1,240 MW combined cycle gas turbine Fairless Power Station in Pennsylvania, and its 468 MW Manchester Street Power Station in Rhode Island, for $1.23 billion to Starwood Energy, pending FERC approval. For $90 million, Dominion is also selling its 25% interest in the Catalyst Old River Hydroelectric Limited Partnership, which owns a 192 MW hydroelectric generating station in Louisiana. The buyer of that stake was not disclosed in Dominion's announcement.
Both transactions are expected to close this year.
In addition, the company continues to evaluate the possible sale of its 50% interest in the Blue Racer Midstream joint venture, which provides services to gas producers in the Utica and Marcellus shales and includes Caiman Energy II as Dominion's partner.
This is not the first time Dominion has offloaded merchant generation assets. In 2013, it sold the Brayton Point coal plant to private equity firm Energy Capital Partners, along with two other plants.
But the sales are not an indication Dominion has lost faith in natural gas. Earlier this year, Dominion announced plans to build eight new gas-fired plants in Virginia capable of generating 3.66 GW by 2033. The utility's plan in Virginia also includes new renewable energy, possibly adding 4.7 GW in the next 15 years.