Southern Co. selling Texas biomass power plant to Austin Energy

After operating one of the nation’s largest wood-fired biomass power plants for the past seven years, a division of Southern Co. has decided to sell it to a nearby Texas utility for $460 million.

Southern Power is selling the Nacogdoches Generating facility to Austin Energy. The transaction is expected to close in mid-2019.

“This transaction provides benefits to Southern Power and offers Austin Energy the opportunity to own a significant regional energy resource,” said Southern Power President and CEO, Mark Lantrip. “Southern Power will continue providing clean, safe, reliable and affordable wholesale energy to customers with a diverse group of assets that includes one of the largest carbon-free renewable energy portfolios in the United States.”

The $460 million purchase price is subject to customary closing adjustments. Proceeds will be used to strengthen the balance sheet of Southern Co., help meet projected equity needs and further de-risk financing plans.

The 115-MW project was created as part of a deal to provide power to Austin Energy in the first place. Nacogdoches Generating Station is located in Sacul, Texas, about 230 miles from Austin.

The plant consists of a bubbling fluidized-bed boiler, a condensing steam turbine generator with an evaporative cooling tower, wood fuel handling system and auxiliary support equipment. The plant is fueled with non-merchantable wood biomass materials, including forest residue from the surrounding areas, pre-commercial thinnings, wood processing residues and clean municipal wood waste.

Barclays is serving as the financial advisor and Baker Botts is serving as primary legal counsel to Southern Power.

(Rod Walton is content director for Power Engineering and POWERGEN International. He can be reached at 918-831-9177 and rod.walton

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