MILWAUKEE, Dec. 20 /PRNewswire-FirstCall/ — Wisconsin Energy Corporation (NYSE:WEC) 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. (NYSE:FPL) .
Point Beach is a 1,033-megawatt facility located in Two Rivers, Wisconsin. 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.
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.
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.”
“FPL Group’s Nuclear Division has an excellent track record operating nuclear plants safely and reliably,” said Art Stall, senior vice president of FPL Group’s Nuclear Division. “FPL Group and Point Beach nuclear programs are focused on safety and continuous improvement. We look forward to working with Point Beach employees in further providing safe, clean and reliable nuclear power to the Wisconsin market for many years to come.”
FPL Energy and its parent company, FPL Group, operate nuclear plants in Florida, Iowa and New England. In addition, FPL Energy is the largest wind energy producer in the United States, owning and operating 47 wind energy facilities, including the Montfort Wind Energy Center in Montfort, Wisconsin.
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.
The sale to FPL Energy is subject to review and approval by various regulatory agencies, including the Public Service Commission of Wisconsin, the U.S. Nuclear Regulatory Commission and the Federal Energy Regulatory Commission, as well as review by the U.S. Department of Justice and the Federal Trade Commission.
Conference Call
Wisconsin Energy has scheduled a conference call at 1 p.m. Central time today to discuss the proposed sale of its Point Beach Nuclear Plant to FPL Energy. The company also intends to discuss earnings guidance for 2007.
To listen to the presentation:
Dial 877-502-9274 up to 15 minutes before 1 p.m. Central time on Wednesday, Dec. 20, 2006. International callers, please dial 913-981-5584. The confirmation code for the call is 9236741.
A replay of the audio portion of the presentation will be available until Wednesday, Dec. 27, 2006, at 888-203-1112. International callers, please dial 719-457-0820. The replay confirmation code is 9236741.
Analysts with questions or comments should contact Colleen Henderson, manager of strategic planning and investor relations, Wisconsin Energy, at 414-221-2592.
Wisconsin Energy Corporation (NYSE:WEC) , based in Milwaukee, is one of the nation’s premier energy companies, serving more than 1.1 million electric customers in Wisconsin and Michigan’s Upper Peninsula and more than 1 million natural gas customers in Wisconsin. The company’s principal utilities are We Energies and Edison Sault Electric. The company’s non-utility businesses include renewable energy technology and real estate development.
Wisconsin Energy Corporation (http://www.wisconsinenergy.com/) has more than $10 billion of assets, 5,300 employees and approximately 56,000 stockholders of record.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are subject to various risks and uncertainties. Forward-looking statements may be identified by reference to a future period or periods or by the use of forward-looking terminology such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “may,” “objectives,” “plans,” “possible,” “projects,” or similar terms or variations of these terms.
Actual results may vary materially from those set forth in forward-looking statements as a result of factors described in Wisconsin Energy’s Form 10-K for the year ended December 31, 2005 and in subsequent reports filed with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
