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Duke puts sale price of Midwest merchant plants at $1.5-$2.5 billion

Duke Energy suggested Tuesday that the 6,600 MW of merchant coal-, oil- and natural gas-fired units it plans to sell in the Midwest will will bring in between $1.5 billion and $2.5 billion.

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While Duke Executive Vice President and CFO Steve Young did not provide a sale-price estimate during the company's fourth-quarter earnings conference call, he did say that the net book value of the 3,400 MW of coal- or oil-fired units and 3,200 MW of gas-fired units is roughly $3.5 billion and that Duke expects to take a pre-tax impairment charge of between $1 billion and $2 billion in the first quarter to reflect the difference between the units' book value and the expected sales price.

Duke on Monday said that it "has initiated a strategic process to exit its Midwest commercial generation business, which includes ownership interests in 13 power plants." Eleven of the plants are in Ohio, with one in Pennsylvania and one in Illinois.

Duke President and CEO Lynn Good said during Tuesday's call that the decision to divest the company's Midwest merchant plants followed the Ohio Public Utilities Commission's February 13 decision to reject Duke Energy Ohio's request to recover additional costs associated with its merchant fleet in the region.


Good said Duke expects it will take at least 12 months to find a buyer, secure needed regulatory approvals and close on the sale.

--Housley Carr, newsdesk@platts.com
--Edited by Jeff Barber, jeff.barber@platts.com