Summary
Exelon Corporation's subsidiary, Exelon Generation Company, LLC, has entered into a Termination Agreement with State Line Energy, L.L.C. (a Dominion Resources Inc. subsidiary) to end a Power Purchase Agreement (PPA) related to the State Line generating facility in Indiana. This agreement, effective upon satisfaction of certain conditions including regulatory approval, will result in State Line paying Exelon Generation approximately $233 million. This payment covers the termination of the PPA, the purchase of existing coal inventories as of October 1, 2007, and other associated assets.
Key Highlights
- 1Exelon Generation Company, LLC (Generation) entered into a Termination Agreement with State Line Energy, L.L.C. (an indirect subsidiary of Dominion Resources Inc.).
- 2The agreement aims to terminate a Power Purchase Agreement (PPA) dated April 17, 1996, concerning the State Line generating facility in Hammond, Indiana.
- 3Under the agreement, Generation controls 515 MW of electric energy and capacity from the State Line facility.
- 4State Line will pay Generation approximately $233 million upon satisfaction of certain conditions, including regulatory approval from FERC and third-party consents.
- 5The payment from State Line covers PPA termination, purchase of coal inventories (as of October 1, 2007), and other assets.
- 6Exelon Generation will assign related contracts (coal purchase, rail leases, transportation) to Dominion's subsidiary, Virginia Power Energy Marketing, Inc., with Dominion providing an indemnity guarantee.
- 7The termination agreement will be void if conditions are not met by December 31, 2007.
Frequently Asked Questions
This filing announces an agreement between Exelon Generation Company, LLC and State Line Energy, L.L.C. to terminate a Power Purchase Agreement (PPA) for the State Line generating facility. It also details the financial and operational implications of this termination for Exelon.
Exelon Generation is expected to receive approximately $233 million from State Line Energy. This amount is contingent upon the fulfillment of several conditions outlined in the Termination Agreement.
The effectiveness of the Termination Agreement is subject to several conditions, including approval from the Federal Energy Regulatory Commission (FERC) and the receipt of consents from various third parties. If these conditions are not satisfied by December 31, 2007, the agreement will be terminated.
Exelon Generation will assign various contracts related to the PPA and the facility's operation, such as coal purchase agreements and rail leases, to Dominion's subsidiary, Virginia Power Energy Marketing, Inc. Dominion will guarantee the indemnification obligations related to these assignments, and Exelon will be released from or indemnified against liabilities under the assigned contracts.