The combined transactions valued at approximately $290 million require the authorization of various regulatory agencies and satisfaction of other customary closing conditions. The sale of the Aquila facilities requires the approval of the Federal Energy Regulatory Commission (FERC), the Kansas Corporation Commission and the expiration of the waiting period under the Hart- Scott-Rodino Act, while the acquisition of the NRG facility requires the approval of the FERC and the expiration of the waiting period under the Hart- Scott-Rodino Act. Approval of the Missouri Public Service Commission may also be required with respect to a component of the NRG facility transaction. The company expects to receive all regulatory authorizations in the first half of 2006.
The purchase of these facilities are designed to meet AmerenUE's increased generating capacity needs as well as provide AmerenUE with additional flexibility in determining AmerenUE's future base-load generating capacity additions. The companies entered into these agreements after a competitive bidding process that began earlier this summer and attracted interest from multiple generation suppliers.
"The acquisition of these generating facilities will ensure that we can continue to reliably supply electricity during periods of peak demand," says Thomas R. Voss, executive vice president and chief operating officer at Ameren. "Importantly, the purchase of these units was our least cost option and will give our company the ability to better consider multiple base-load electric generation options over the next few years to meet growing customer demand."
AmerenUE noted that the purchase of these facilities is not related to the recent loss of generating capacity at the company's 440-megawatt Taum Sauk hydroelectric plant. On Dec. 14, 2005, a breach of the upper reservoir of that plant resulted in significant flooding and has caused the plant to cease operations.
Voss added, "Negotiations surrounding the purchase of these facilities commenced several months ago and were related to addressing long-term resource planning objectives of the company. However, the purchase of these facilities will ensure that AmerenUE will be able to meet its near-term generation needs as the company and other agencies continue their investigation into the Taum Sauk matter."
Decisions related to the future operation of the Taum Sauk facility will not be made until the investigations and further review and analysis surrounding the future operation of the facility are completed.
The addition of the generating units announced today is also beneficial from an environmental perspective as they emit low levels of nitrogen oxide. The use of natural gas as the primary fuel source also ensures that sulfur dioxide emissions are minimal. "These units are considered 'clean technology' which have no appreciable impact on air quality," Voss added. "In fact, the U.S. Environmental Protection Agency considers these peaking units 'insignificant emission sources.'"
These generating facilities, which are all directly connected to Ameren's transmission system, include a total of 18 simple-cycle combustion turbine generators fueled with natural gas using GE 7EA turbines.
Unlike AmerenUE's large "base-load" plants, like the Callaway nuclear plant near Fulton, Mo., or the Labadie Plant in Franklin County, Mo., these generating units will only be run at peak times.
AmerenUE is a subsidiary of St. Louis-based Ameren Corporation. Ameren companies serve 2.3 million electric customers and 900,000 natural gas customers in a 64,000-square-mile area of Missouri and Illinois.
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Forward-Looking Statements Statements made in this release, which are not based on historical facts, are "forward-looking" and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such "forward-looking" statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs, plans, strategies, objectives, events, conditions, and financial performance. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, AmerenUE is providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. The factors discussed elsewhere in this release and in AmerenUE's filings with the Securities and Exchange Commission could cause results to differ materially from management expectations, as suggested by such "forward-looking" statements.