Located at 1872 N. Burris Rd. off the Maricopa-Casa Grande Highway, the Desert Basin is a 588-megawatt plant (according to industry sources, one megawatt powers approximately 750 to 1,000 households). The sale marks Reliant's first disposition of the year, according to a company spokesman, and is part of a strategy to prepay indebtedness and possibly acquire new assets.
"We're consistently reviewing our assets," the spokesman tells GlobeSt.com, adding that Reliant currently is in a "restructuring" phase. "We sold because SRP is an ideal fit for the community."
The transaction is still subject to regulatory approvals and is expected to close by year's end. "The sale of our Desert Basin plant is consistent with our strategy of tightening our strategic focus and strengthening our balance sheet," Joel Staff, Reliant's chairman and CEO, said in a press release.
The Casa Grande plant is a combined cycle facility built by Reliant, which started commercial operation in 2001. The "environmentally friendly" natural gas plant currently employs more than 25 people.
Reliant, which operates 117 power plants nationwide, is now looking to acquire all--or part of--CenterPoint Energy Inc.'s 81% interest in Texas Genco Holdings Inc. While Reliant and CenterPoint now function as separate entities, the two companies were once under the same umbrella.
According to the Reliant spokesman, the company was forced to split its regulated and unregulated entities due to a Texas electrical restructuring law passed in the late 1990s. CenterPoint emerged with the regulated assets--including three gas distribution companies. The two Houston-based companies are expected to reach a sale agreement that's "neutral to earnings per share in 2004," according to a statement.
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