Green Bay, WI – WPS Resources Corporation’s (NYSE: WPS) nonregulated subsidiary, WPS Energy Services, Inc., announced today that a definitive agreement has been signed to sell the Sunbury generation facility located in Shamokin Dam, Pennsylvania, to Corona Power, LLC. The sale price for the 421.7-megawatt power plant is $30.4 million, and is subject to certain working capital and other post-closing adjustments. The total estimated gain to be recognized on the sale is expected to be approximately $20 million pre-tax. The pre-tax gain will be included in discontinued operations. In addition to the sales proceeds, the sale is also expected to generate approximately $12 million in cash tax benefits that will be realized over the next one to four years depending on the use of alternative minimum tax credits.
The proposed sale is subject to Federal Energy Regulatory Commission approval and to the buyer obtaining acceptable financing. The transaction is expected to close in the third quarter of 2006. Prior to reaching final agreement on the sale, the union employees of Local 1600 of the International Brotherhood of Electric Workers (IBEW) accepted and ratified a new five-year labor agreement with the buyer, which remains contingent on the closing of this transaction.
WPS Energy Services had been evaluating Sunbury’s future since 2004. Mark A. Radtke, president of WPS Energy Services, said, “After carefully reviewing alternatives and current business conditions, the sale of the plant in this transaction with Corona was determined to be the best alternative. It allows our committed employees to continue to operate the facility and maintains Sunbury as a vibrant part of the community, while maximizing value for our shareholders. The sale of the facility will allow us to better focus on our existing competitive energy business while continuing to evaluate other opportunities to add to and optimize our nonregulated generation fleet.” The Corona owners are excited about their purchase of the Sunbury plant. Neil W. Hedrick, president of Corona, said, “This is a natural outgrowth of our fuels- and trucking-related business. Sunbury is an excellent choice with its highly motivated and experienced workforce in a superior location in the PJM power marketing grid. We want to especially thank the leadership of IBEW Local 1600 for their part in making this happen.”
