Coal

Update: Mergers and Acquisitions

Issue 8 and Volume 106.

Kansas City-based Aquila has agreed to sell its stake in the 180 MW Lockport gas-fired facility near Buffalo, New York to Fortistar Capital Inc.

German utility E.ON has completed the acquisition of UK utility Powergen, opening the way for more acquisitions in the Midwestern U.S. power market. E.ON plans to use Powergen’s Kentucky-based LG&E as a springboard for further U.S. growth.

Green Bay, Wis.-based Wisconsin Public Service has agreed to buy the 180 MW De Pere Energy Center from Calpine Corp. and also agreed to buy electricity from Calpine’s proposed Sherry Energy Center. Both facilities are in Wisconsin.

Entergy has reached agreements in principle for the purchase of the 510 MW Vermont Yankee Nuclear Station. A ruling from the Vermont Public Service Board prohibiting Entergy from keeping any excess decommissioning funds set aside to pay for the dismantling of old nuclear plants had stalled the deal, but the matter has now been resolved with state regulators. Under the agreements, non-Vermont members of the consortium will forfeit to Entergy their claim to any excess decommissioning funds.

Mirant will sell its 309 MW gas-fired power plant in Neenah, Wis. to Alliant Energy Corp. for $109 million. The entire power output of the facility is under contract to WE Energies through June 2008.

Headwaters Inc. has agreed to acquire Industrial Services Group Inc., parent of ISG Resources Inc., the largest marketer and manager of coal combustion products in the U.S., whose primary revenue source is the sale of fly ash, produced from the combustion of coal in the generation of electricity used as a substitute for cement in the production of concrete.