Dominion Energy Plans $1.5 Billion Power Plant Sale
Dominion is now relying on asset sales and other financial maneuvering to hit their 2020’s $8 billion target.
(Bloomberg) -- Dominion Energy Inc. is working with JPMorgan Chase & Co. to seek buyers for two power plants in Pennsylvania and Rhode Island, according to people familiar with the matter, as it sells assets to pay down debt.
The Richmond, Virginia-based company could fetch about $1.5 billion from the sales of its natural-gas-fired Fairless and Manchester Street Power Stations, said the people, who asked to not be identified because the matter isn’t public.
Representatives for Dominion and JPMorgan declined to comment.
Dominion executives told investors in April that it would raise $1 billion to $1.5 billion selling non-core assets to pay down debt and to ensure that it will meet a key financial objective.
The company has committed to raise up to $8 billion from its various subsidiaries by 2020. It was counting on getting a substantial amount of that money selling its interest this year in a liquefied natural gas plant on the coast of Maryland to Dominion Energy Midstream Partners LP, a master-limited partnership it controls. But it tabled that plan after regulators took a key tax perk away from MLPs in March, sending shares in that sector tumbling.
Dominion is now relying on asset sales and other financial maneuvering to hit that $8 billion target, according to an investor presentation in April. In March, it said it would consider selling its interest in pipeline operator Blue Racer Midstream. In June, the company indicated in an investor presentation that it would consider selling the Fairless and Manchester plants.
The two plants are part of Dominion’s so-called merchant generation business, which means they sell electricity into the open market at the best price, rather than to a fixed set of customers whose rates are set by regulators.
Dominion and other large, diversified energy companies have been retreating from merchant power in recent years and expanding into regulated power, a steadier business with better growth prospects.
Dominion sold three merchant plants about four years ago, ahead of a buying spree in the regulated utility space. It agreed to buy Scana Corp. for about $7.9 billion in January, a transaction facing stiff political pushback in South Carolina. Dominion also acquired the utility Questar Corp. in 2016.
To contact the reporters on this story: Kiel Porter in New York at kporter17@bloomberg.net;Mark Chediak in San Francisco at mchediak@bloomberg.net
To contact the editors responsible for this story: Elizabeth Fournier at efournier5@bloomberg.net, Matthew Monks, Michael Hytha
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