Friday, April 8, 2011

Oglethorpe Power Completes Purchase of Combined Cycle Units

/PRNewswire/ -- Oglethorpe Power Corporation today completed the purchase of two natural gas-fired, combined cycle generating units in Murray County, Ga. with the acquisition of KGen Murray I and II, LLC, a wholly owned subsidiary of KGen Power Corporation. The purchase price was approximately $529 million, including working capital and other closing adjustments.

The two Murray units represent an aggregate summer planning reserve generating capacity of about 1,220 megawatts (MW). This brings Oglethorpe Power's total owned generating capacity to approximately 7,048 MW.

The Murray acquisition also includes an existing power purchase and sale agreement with Georgia Power Company for the entire output of Murray I through May 31, 2012. Initially, both units are planned to be operated independently of the other generating facilities owned and operated by Oglethorpe Power but will be integrated into the system as needed.

Oglethorpe Power first disclosed that it was negotiating to purchase some then-unnamed natural gas facilities in October 2010 and followed in January 2011 with an announcement that it had signed a purchase and sale agreement for the Murray units, subject to applicable regulatory approvals and approval by KGen stockholders.

"We couldn't be more pleased with today's acquisition," said Elizabeth B. Higgins, executive vice president and chief financial officer. "This purchase gives Oglethorpe Power and our Member Systems a significant block of generating capacity at a very reasonable cost without the added time and additional expense of constructing a new facility."

In purchasing the Murray units, Oglethorpe Power has now officially canceled construction of a planned 605-megawatt, combined cycle generating plant that was in the siting stage.

Ms. Higgins said Oglethorpe Power expects long-term financing for the Murray units to come primarily from loans guaranteed by the Rural Utilities Service (RUS). Taxable bonds would make up the difference for any amount not funded through the RUS loan program.

Oglethorpe Power Corporation (OPC) is the nation's largest power supply cooperative with more than $7 billion in assets serving 39 Electric Membership Corporations which, collectively, provide electricity to 4.1 million Georgians.

A proponent of conscientious energy development and use, OPC balances reliable and affordable energy with environmental responsibility and has an outstanding record of regulatory compliance. Its diverse energy portfolio includes natural gas, hydroelectric, coal and nuclear generating plants with a combined capacity of approximately 7,048 MW, as well as purchased power.

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