Power Engineering - Wisconsin Energy to sell nuclear plant for $1 bln to FPL Energy

20 December 2006 -- Wisconsin Energy Corp. announced today that its subsidiary, Wisconsin Electric Power Co., doing business as We Energies, has reached a definitive agreement to sell its Point Beach Nuclear Plant to FPL Energy, a subsidiary of FPL Group, Inc.

FPL Energy will purchase the plant, its nuclear fuel and associated inventories for approximately $1 billion, and enter into a long-term agreement under which FPL Energy will sell 100 percent of the output of Point Beach to We Energies. The transaction is expected to close in August 2007.

Point Beach is a 1,033-MW facility located in Two Rivers, Wisconsin, US. The first unit at Point Beach went into commercial service in 1970 and is licensed to operate until 2030. The second unit was brought on line in 1973 and is licensed to operate until 2033.

Under the agreement, the cost per kilowatt-hour for We Energies' customers is below the projected cost of power had We Energies continued to own and operate the plant. The term of the agreement is for the expected remaining life of each unit at the plant.

As part of the transaction, FPL Energy will offer employment to all current employees at the plant. In addition, FPL Energy will be responsible for the ultimate decommissioning of the facility and the cost of that decommissioning.

After closing the transaction, We Energies also will receive approximately $300 million from a trust fund that had been established to pay for the decommissioning of the plant.

The Public Service Commission of Wisconsin will determine how the net proceeds from the sale will be used to benefit customers.

Upon closing, FPL Energy will assume management and operation of the plant from Nuclear Management Company (NMC) and will work with NMC to ensure a smooth transition. NMC has managed the plant since 2000.

In February 2006, Wisconsin Energy announced its intent to conduct a formal review of options for the future ownership and operation of Point Beach. Several options to preserve the benefits of Point Beach were considered, including continued operation of the plant by NMC, operation by a third-party operator other than NMC, a return to in-house operation of the plant by We Energies, or the partial or complete sale of the plant with a long-term energy agreement.

"We had no pre-determined outcome when we began the review of our options for Point Beach," said Gale E. Klappa, chairman, president and chief executive officer of Wisconsin Energy. "Our goal was to identify the best outcome for our customers and stockholders and to protect a valuable energy resource for Wisconsin. I believe we have achieved that goal."

The company also announced today that FPL Energy has provided two wind options for We Energies. The first allows We Energies to select FPL Energy to equip and construct the We Energies Blue Sky Green Field Wind Project in northeastern Fond du Lac County. This project is currently under regulatory review.

The second option allows We Energies to acquire a site under development by FPL Energy in central Wisconsin. We Energies may exercise either of these options independent of the sale of the Point Beach facility.

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