Archive for Thursday, April 1, 2004

Aquila sells stake in plant

April 1, 2004

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— Aquila Inc. has completed the sale of its 50 percent stake in a power plant near Pleasant Hill, taking a $46.5 million loss.

Aquila sold its interest in the 585-megawatt Aries plant to Calpine Corp. of San Jose, Calif. Calpine, largest operator of independent power plants in North American, was already a partner in the project.

Aquila agreed to pay Calpine $5 million and some rights to convey power over transmission lines. Calpine returns $17.5 million in previously posted collateral, which means Aquila receives $12.5 million in cash.

The sale continues Aquila's move away from the sale of electricity as a wholesaler.

"We're not in the merchant business anymore," Aquila spokesman Al Butkus said.

While it lost money on the investment, the sale benefits Aquila by removing the burden of rising cash payments to buy power produced at the plant. Under the agreement, Aquila provided natural gas to fire the plant's generators and then bought power to resell.

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