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15 November 2004 - Duke Energy has sold its Luna merchant project to PNM Resources, Tucson Electric Power and Phelps Dodge Corporation for $40m. Duke's 2004 divestiture target has now been significantly exceeded as total asset sales have so far generated $3.1bn in proceeds.
Fred Fowler, president and chief operating officer of Duke Energy, said, "With the sale of the Luna project, we are continuing to divest our partially completed merchant facilities, further reducing our exposure in the merchant sector."
Duke Energy has so far this year, announced or closed asset sales that will generate $3.1bn in proceeds including $750m in tax benefits and $840m in debt reductions.
The sale includes the partially completed 570 MW combined cycle generating facility in New Mexico, USA that is currently in a construction deferral. PNM will oversee the construction, expected to cost around $110m, and will also operate the plant. All three purchasing companies will each own a third and will be responsible for a third of the costs and expenses.
Phelps Dodge Mining Co. is expected to use 190 MW of the electricity generated for its operations in New Mexico and Arizona. J. Steven Whisler, chairman and chief executive of Phelps Dodge Corp. said, "Our investment in this efficient, state of the art plant will help us stabilize energy costs for our operations in the south-western United States and will increase the reliability of our energy supply."
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