The Federal Energy Regulatory Commission has conditionally accepted NextEra Energy Inc.'s acquisition of northern Florida utility Gulf Power Co. from Southern Co.
In a Dec. 20 authorization order, the commission said that the acquisition does not raise any horizontal or vertical integration or regulation concerns. However, the regulator did note in the order that NextEra has committed to a transmission rate cap during the five-year transition period during which Gulf Power moves completely under its management. FERC said that the company should be willing to extend the rate cap if the transition period stretches beyond five years.
The deal terms include a $5.1 billion cash purchase price, which NextEra expects to finance through the issuance of new debt, and the assumption of $1.4 billion of Gulf Power debt. Gulf Power serves about 462,000 electric customers. (FERC docket EC18-117)
Connected to the acquisition is NextEra's purchase of Southern Power Co.'s stake in the combined-cycle Stanton power plant and simple-cycle Oleander facility and lease of Oleander unit 1 to General Electric Co. unit Power Holding LLC. Both these transactions were consummated on Dec. 5. (FERC dockets EC18-119 and EC18-131)
Southern is also selling natural gas utility Florida City Gas, which serves about 110,000 customers in southeastern Florida, but that does not require FERC authorization because it is not connected to any power generation facilities.
Southern said in May that it will use deal proceeds to address a $7 billion equity need over the next five years as it works to mitigate the effects of federal tax reform.