Summary
Exelon Corporation, through its subsidiary Exelon Generation Company, LLC, announced on April 4, 2007, an agreement to sell certain rights related to a long-term contract with Tenaska Georgia Partners, LP. This transaction involves the sale of 942 megawatts of capacity, energy, and ancillary services to Georgia Power, a subsidiary of Southern Company, under a tolling agreement commencing June 1, 2010, and lasting for 15 years, with a potential five-year extension. This strategic move is expected to provide Exelon Generation with more stable and predictable cash flows compared to participating in the volatile spot wholesale energy markets. While the transaction is subject to approval by the Georgia Public Service Commission (GPSC), which is anticipated in the third quarter of 2007, it is projected to generate approximately $43.5 million in annual revenue through capacity payments. Upon GPSC approval, Exelon Generation anticipates recognizing a non-cash after-tax loss of up to $75 million.
Key Highlights
- 1Exelon Generation Company, LLC to sell rights for 942 MW capacity, energy, and ancillary services from its Tenaska Georgia Partners, LP contract.
- 2Agreement is a 15-year tolling agreement with Georgia Power (a Southern Company subsidiary), starting June 1, 2010, with a 5-year extension option.
- 3Transaction aims to provide greater cash flow certainty by moving away from volatile spot wholesale markets.
- 4Expected annual revenue of approximately $43.5 million in capacity payments over the agreement term.
- 5Transaction is subject to approval by the Georgia Public Service Commission (GPSC).
- 6A non-cash after-tax loss of up to $75 million is anticipated upon GPSC approval.
- 7GPSC approval is expected during the third quarter of 2007.