The sale involves five hydro generating facilities in Maine that produce a total of 23MW of electricity and are 100% owned by PPL; and PPL’s 50% ownership interest in a separate 13MW hydroelectric project, of which the other 50% is already owned by another ArcLight affiliate.
The $81M excludes certain contingent consideration that will be realized upon completion of PPL’s previously announced potential sale of three other hydroelectric facilities to the Penobscot River Restoration Trust.
That transaction originated in June 2004, when PPL partnered with a coalition of environmental groups, government agencies and the Penobscot Indian Nation on a settlement agreement to provide the Trust with the option to buy these three facilities. The Trust exercised this option in June 2008, and the completion of that sale is pending the receipt of certain state and federal regulatory approvals.
“PPL believes strongly in this important project and remains fully committed to obtaining all approvals necessary to transfer these three facilities to the Trust,” said William H. Spence, PPL’s executive vice president and chief operating officer.
PPL expects to record a special after-tax gain of approximately $0.06 per share, excluding the contingent consideration, in the fourth quarter of 2009 as a result of the ArcLight transaction. PPL would record another special after-tax gain of approximately $0.02 per share upon receipt of the contingent consideration from ArcLight.
Both the initial and the contingent consideration from ArcLight’s affiliate would enhance PPL’s cash flow position and be modestly accretive to the company’s earnings. PPL is not changing its current 2009 forecast of earnings from ongoing operations as a result of the sale.
