Centrica acquires further electricity generation

Centrica plc today announced that it has entered into an agreement to acquire the entire economic interest in two of TXU’s gas-fired power stations in East Anglia with a combined generation capacity of 705MW.

For a single up-front payment of £173.5 million, Centrica is acquiring operating leases of approximately 20 years on the two plants based in Peterborough and King’s Lynn.  Centrica will assume responsibility for the day to day operation and management of the power stations and 77 staff will transfer to Centrica.  The transaction will be funded from existing funds and is expected to complete by the end of September 2001, subject to OFT approval.

This acquisition follows Centrica’s purchase, in May, of a 60 per cent share in Humber Power Limited, which owns and operates a 1260MW gas fuelled power plant in Stallingborough.  Together, the 1460MW capacity will provide Centrica with more than 30 per cent of peak demand for its existing 4.5 million electricity customers.

As part of its risk management strategy the company has said it plans to source 20-25 per cent of its future peak electricity requirements from its own generating capacity.  This strategy offers increased long term stability and protection against electricity price fluctuations and spikes.

Roy Gardner, Chief Executive of Centrica said: “Following our acquisition of Humber Power in May, today’s transaction reinforces our commitment to grow our electricity business and to continue offering customers a competitive package.

“Since the electricity market opened three years ago, we have attracted over 4.5 million customers and we’re on course to reach our longer term target of 7 million customers.”