HOUSTON, Dec. 2 /PRNewswire/ -- Direct Energy announced today that it has
entered into a binding agreement to acquire 100 percent of the partnership
interests in Frontera Generation LP (FGLP), a subsidiary of TECO Energy Inc.
(TECO) for $134 million in cash, plus a share of potential transmission
reliability service revenues. FGLP owns the Frontera Power Station
(Frontera), a gas fired combined-cycle 477-megawatt power plant located in the
southern region of Texas, within the area served by Direct Energy's CPL Retail
Energy subsidiary. Frontera is a 100 percent merchant plant and is debt free.
Frontera is the second power station that Direct Energy has bought in
Texas this year, following the acquisition in June of the Bastrop Energy
Center near Austin. As a result, Direct Energy can now meet approximately
25 percent of its current peak demand in Texas from its own assets. This is
another step in the company's target of achieving at least 35 percent equity
cover in the Texas ERCOT market.
Frontera was designed to run flexibly and has proved this capability by
running on a daily dual cycle basis since commissioning of the full plant in
May 2000. This type of operation is well aligned with Direct Energy's retail
load in Texas, where the company has just over 800,000 residential and
commercial customers.
Deryk King, chief executive officer and president of Direct Energy, said,
"Today's acquisition is in line with our risk management strategy of meeting
the optimal proportion of our energy requirements from our own generation. As
with our recent Bastrop Energy Center acquisition, our timing has meant that
we have acquired a modern station for less than half the cost of building a
new plant."
Completion of the transaction is expected by the end of 2004 and is
subject to customary conditions and approval by the Federal Trade Commission
and the Department of Justice.
About Direct Energy
Direct Energy is part of the Centrica group of companies, one of the
largest multi-state providers of deregulated retail energy services in North
America. The North American operations have grown to approximately 5 million
customer relationships. Globally, the Centrica group of companies is a
leading provider of energy and other essential services with approximately
33 million customer relationships. For more information, visit
http://www.directenergy.com or http://www.centrica.com .
SOURCE Direct Energy
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Related links:
http://www.directenergy.com
http://www.centrica.com
CONTACT:
Cynthia Cordova of Direct Energy,
+1-972-409-3280, or cynthia.cordova@na.centrica.com
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