First Energy Corporation has asked the Federal Energy Regulatory Commission (FERC) for permission to sell 11 hydroelectric power generation stations in Pennsylvania, West Virginia and Virginia, including the Seneca Pumped Storage at Kinzua Dam.
According to a press release from First Energy, the facilities in the proposed sale are owned by First Energy Generation, Allegheny Energy Supply Company and Green Valley Hydro and have a combined generation capacity of 527 megawatts. The Seneca Pumped Storage at Kinzua Dam accounts for 451 megawatts of that total.
The sale represents about two and a half percent of First Energy's generating capacity of around 20,000 megawatts.
Employees at the stations are expected to remain with the new owner, Harbor Hydro Holdings, a subsidiary of LS Power Equity Partners II, an employee-owned, independent power company. It is a developer, owner, operator and investor in power generation and electric transmission infrastructure throughout the United States.
Jennifer Young, of First Energy external communications, spoke about the ongoing issue of the Seneca Nation of Indians' attempts to get the next 50-year operations license for the station.
"Resolving the potential competing license application for Seneca is a closing condition to the proposed hydro sale transaction," she said. "We are working to reach a settlement on the application ahead of a FERC decision on the matter and expect to complete that in 2013."
A spokesman for the Seneca Nation of Indians couldn't be reached for comment on Thursday.
A sales agreement was reached on Aug. 23, and, if approved, the proposed transaction is expected to close in the fourth quarter of this year. The agreement is subject to customary and other closing conditions, including FERC, the Commonwealth of Virginia's State Corporation Commission and various other approvals.
Young explained the company's reasoning in pursuing the sale of the generating stations. "We first announced the intention to sell a portion of our unregulated, hydro generation assets during the fourth quarter 2012 quarterly investor call, held in February 2013. The sale of these units supports the company's financial plan to divest non-core, unregulated generation assets and use the proceeds to improve credit metrics in our competitive business. These units were chosen for sale as they are more attractive to potential buyers versus other generating assets," she said.