PSEG Power has agreed to sell its stakes in a pair of coal-fired power plants in western Pennsylvania, representing a combined generation capacity of 776 MW.
The company is divesting from the 1,711 MW Keystone Generating Station in Shelocta and the 1,711 MW Conemaugh Generating Station in New Florence as it implements its strategy to exit coal-fired generation entirely, having already sold or scheduled for early retirement the remainder of its coal-fired plants.
ArcLight Capital Partners is acquiring the stakes through subsidiaries of AL Chief Power, a portfolio company of the private equity firm's fifth energy fund, ArcLight Energy Partners Fund V.
ArcLight already controls most of the remaining interests in the two plants through term loan B financing vehicle Chief Power Finance (PFR, 12/5/14).
The sale price has not been disclosed but is "less than the current book value" of the assets, according to paperwork filed by PSEG with the U.S. Securities and Exchange Commission on June 21. The company expects to recognize a pre-tax impairment charge of between $375 million and $415 million.
A spokesperson for PSEG in Newark, N.J. did not immediately respond to an inquiry.
The deal is expected to close in the second half of the year, subject to regulatory approvals.
Until 2017, the owners of the two plants had included the ArcLight fund, PSEG, GenOn Energy and NRG Energy, but GenOn and NRG's stakes have already transferred to other owners in the wake of GenOn's Chapter 11 filing in June 2017.
NRG sold its separate minority stakes in Keystone and Conemaugh to an investment vehicle of independent power producer Olympus Power called Bowfin KeyCon Power (PFR, 7/2), while a group of financial investors took ownership of GenOn's leases over parts of the plants as a result of the restructuring of a sale-leaseback financing arrangement (PFR, 10/11).