Centrica acquires its first generation plant in North America

Centrica today announced it has entered into an agreement with FPL Energy LLC to acquire Bastrop Energy Partners L.P., owner of the Bastrop Energy Center (BEC) power station in Texas, for $143 million (£79.9 million) in cash.

The acquisition of this 540 megawatt plant, at a price equivalent to $265 (£149) per kilowatt, marks Centrica’s first purchase of an electricity generation asset in North America. The natural gas-fired, combined-cycle station became operational just two years ago.

The transaction is subject to FPL Energy completing the purchase of its joint venture partner’s 50 per cent stake in BEC, details of which were announced last night.

Centrica chief executive Sir Roy Gardner said: "This acquisition has been carefully timed. We’ve been monitoring the Texas market closely and asset values are now much more reflective of forward wholesale electricity prices than they have been.

"Today’s announcement is in line with our strategy to meet a significant proportion of our customer requirements from our own capacity, both in North America and in the UK."

BEC is located 25 miles east of Austin, where it is well positioned to serve Centrica’s customer supply base in Texas. The plant includes 55 megawatts of rapid-response peak period generating capacity.

Completion of the transaction is expected by the third quarter of 2004. This is subject to competition approval by the Federal Trade Commission and the Department of Justice.

Upon completion, Centrica plans to retain existing plant employees involved in the commercial operations of BEC.

Centrica currently serves approximately 900,000 residential and commercial customers in Houston, Dallas-Fort Worth, Midland-Odessa and throughout South and West Texas.