DOW JONES NEWSWIRES
PPL Corp. (PPL) agreed to sell its Long Island generation
business to J-Power USA Development Co., a unit of Tokyo-based
Electric Power Development Co. (9513.TO), for about $135 million
plus working capital.
The sale, expected to close later this year, will reduce
second-quarter earnings by 9 cents to 12 cents a share, but boost
cash flow and modestly add to earnings thereafter, said PPL Chief
Operating Officer William H. Spence. The company left its 2009
earnings forecast unchanged.
Analysts were expecting a second-quarter profit of 40 cents,
according to a survey by Thomson Reuters.
The two plants, which are each 79.9-megawatt facilities, sell
their output to the Long Island Power Authority.
"These have been good assets for us but are not core to our
concentrated generation positions in the PJM Interconnection and in
the Northwest," said Spence. The company has sold numerous assets
in recent years.
J-Power has continued to grow its U.S. presence. A company
executive told Bloomberg News Wednesday J-Power was in talks to
purchase part or all of three natural-gas-fired power plants on the
East Coast. He declined to name the facilities in question.
The sale comes as Pennsylvania-based PPL, which serves 4 million
customers in that state and the U.K., tries to cope with reduced
power demand because of the recession and falling electricity
prices, which are forcing power providers to cut spending.
Two weeks ago, Moody's Investors Service lowered its ratings
outlook on PPL and various units to negative, citing concerns about
electric-market rates and increased capital spending on
infrastructure. The reduced view followed PPL's posting of a 7.3%
drop in first-quarter earnings amid lower wholesale margins in the
U.S.
Shares were recently up 0.6% at $32.53.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com