SAN DIEGO, Dec. 14, 2005 (PRIMEZONE) -- Due to the increased market valuation of coal-fired power plants in Texas, Sempra Generation, a subsidiary of Sempra Energy (NYSE:SRE), today announced that it is contemplating the sale or refinancing of its interests in all of its Texas power-generation assets.
The coal-fired assets involved in the sale or refinancing include the company's wholly owned 305-megawatt (MW) Twin Oaks Power plant in Robertson County, as well as the 632-MW Coleto Creek Power plant in Goliad County that Sempra Generation co-owns in a joint venture with Carlyle/Riverstone.
The joint venture, Topaz Power Group, is the Austin, Texas-based organization that owns and manages Coleto Creek Power and three Texas natural gas and oil-fired plants in Laredo, San Benito and Corpus Christi. The oil and natural gas-fired plants would also be included in the sale or refinancing.
"We have stated in the past that any of our assets are for sale at the right price and it appears that the market interest in Texas generation -- specifically coal-fired power plants -- is especially high at this time," said Mark A. Snell, group president, for Sempra Global, the umbrella for Sempra Energy's competitive energy businesses.
"Sempra Energy's share of any cash proceeds will be used to repay debt associated with the assets and to help fund the company's other capital projects, such as liquefied natural gas receipt terminals, new interstate natural gas transmission pipelines and natural gas storage facilities," Snell said.
Goldman Sachs has been retained to lead the marketing process for the coal-fired power plants and Greenhill & Co. will market the other generation assets in Texas.
If market conditions remain favorable, Sempra Generation expects the transaction to be concluded in 2006.
Twin Oaks Power was acquired from Texas-New Mexico Power Co. in November 2002. In July 2005, Sempra Generation announced its plans to expand the plant by 600 MW, tripling the facility's size to more than 900 MW.
"Sempra Generation is still contemplating whether to sell or retain its interest in the expansion," Snell said.
In July 2004, Sempra Generation and Riverstone/Carlyle formed the Topaz Power Group, which acquired Coleto Creek and eight other plants from American Electric Power. All but four of the Topaz Power Group plants have been sold or idled. In addition to the coal-fired Coleto Creek Power plant, three oil and natural gas-fired Topaz Power Group Texas plants will be included in the marketing process, including: the 697-MW Barney M. Davis plant near Corpus Christi; the 255-MW La Palma Power Station in San Benito and the 178-MW Laredo Power Station in Laredo.
The 182-MW Bates Power Station in Palmview will be idled when its power contract with the state expires at the end of 2005.
Sempra Generation acquires, operates and maintains power plants and energy infrastructure for competitive markets.
Sempra Energy, based in San Diego, is a Fortune 500 energy services holding company with 2004 revenues of $9.4 billion. The Sempra Energy companies' 13,000 employees serve more than 29 million consumers in the United States, Europe, Canada, Mexico, South America and Asia.
This press release contains statements that are not historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When the company uses words like "believes," "expects," "anticipates," "intends," "plans," "estimates," "may," "would," "should" or similar expressions, or when the company discusses its strategy or plans, the company is making forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Future results may differ materially from those expressed in the forward-looking statements. Forward-looking statements are necessarily based upon various assumptions involving judgments with respect to the future and other risks, including, among others: local, regional, national and international economic, competitive, political, legislative and regulatory conditions and developments; actions by the California Public Utilities Commission, the California State Legislature, the California Department of Water Resources, the Federal Energy Regulatory Commission and other regulatory bodies in the United States and other countries; capital markets conditions, inflation rates, interest rates and exchange rates; energy and trading markets, including the timing and extent of changes in commodity prices; the availability of natural gas; weather conditions and conservation efforts; war and terrorist attacks; business, regulatory, environmental, and legal decisions and requirements; the status of deregulation of retail natural gas and electricity delivery; the timing and success of business development efforts; the resolution of litigation; and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the company. These risks and uncertainties are further discussed in the company's reports filed with the Securities and Exchange Commission that are available through the EDGAR system without charge at its Web site, www.sec.gov and on the company's Web site, www.sempra.com.
Sempra Generation is not the same company as the utilities, SDG&E or SoCalGas, and is not regulated by the California Public Utilities Commission.