Southern Company has entered into an agreement to sell its gas and electric entities in Florida to NextEra Energy for approximately $6.475 billion.
In a statement that was followed by an investor call this morning, Company CEO Tom Fanning said the sale would bolster Southern Company’s financial profile.
According to the company, proceeds from the sale of Gulf Power, Florida City Gas and Southern Company’s interest plants Oleander and Stanton will be used to “reduce debt and improve Southern Company’s balance sheet.”
“These Florida businesses are being sold at a price that provides substantial value to our stockholders, while entrusting the customers of these exceptional franchises to a high-quality utility company that has a well-established presence in the state,” said Fanning.
NextEra, headquartered in Florida, said it would finance approximately $5.1 billion of the purchase price through issuance of new debt.
"These transactions will provide meaningful benefits for the state of Florida, and Gulf Power and Florida City Gas customers, as well as NextEra Energy shareholders," said Jim Robo, chairman and chief executive officer of NextEra Energy.
The sale of the entities is conditioned upon approval by the Federal Communications Commission and the Federal Energy Regulatory Commission. It will also be dependent upon the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The Southern Alliance for Clean Energy (SACE) raised concern that such a deal could yield control of Florida’s energy market to one entity, limiting competition and failing to protect public interests.
“Such consolidation of control may limit competition at a time when we need more and not less,” said SACE in a statement following news of the impending sale.
The sale of Florida City Gas is expected to be complete by the third quarter of this year while transactions for Gulf Power and the two other plants are set for the first quarter of 2019.
Entities southern Southern Company is selling to NextEra
- Gulf power which serves 450,000 customers in eight counties in northwest Florida.
- Florida City Gas serves 110,000 natural gas customers in 4 counties in Florida
- 100 percent ownership of natural gas fueled Plant Oleader
- 65 percent ownership of Stanton Energy.
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