DOW JONES NEWSWIRES
Southern Co. (SO) agreed to acquire a planned east Texas biomass
power plant from American Renewables LLC as utilities continue to
build their alternative-energy presence.
Wind and solar have been among the biggest areas of focus for
utilities looking to diversify from coal- and natural gas-powered
facilities amid the potential of U.S. climate-change
legislation.
Terms of the deal weren't disclosed. The 165-acre project is
slated to break ground this fall and be in operation by mid-2012.
It is billed as one of the nation's largest biomass-fueled
electricity-producing plants and is aimed at generating about 100
megawatts of power.
There is a 20-year deal in place to sell the plant's output to
Austin Energy, the municipal utility owned and serving Texas'
capital city.
"This acquisition fits Southern Power's business strategy of
growing the business in the wholesale market through acquiring
generating assets and building new units - for which the output is
significantly covered by long-term bi-lateral contracts," said
Southern Power Co. President and Chief Executive Ronnie Bates.
Southern Co., whose business is focused in the Southeast, is one
of the largest owner of coal-powered plants in the U.S. and like
other power producers has continued to see reduced demand. The
company is one of four power companies expected to split $18.5
billion in federal financing to build the next generation of
nuclear reactors. It also is involved in efforts to capture and
store greenhouse-gas emissions from coal-fired power plants and is
planning to expand its presence in industrial-scale plants that
burn wood and other plant material, or biomass.
Shares closed Thursday at $31.82 and were inactive premarket.
The stock is down 14% this year.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com