PPL Corp. has agreed to sell its one-third stake in Safe Harbor Water Power Corp. plus two wholly owned generating plants for $381 million cash.
The buyer of the assets is LS Power Group, a New York-based generation and transmission company, it was announced Thursday.
The deal, set to be completed in the fourth quarter, is not expected to have an impact on Safe Harbor's 72 employees or its operation.
That's because the remaining two-thirds will continue to be owned by Constellation Energy, parent company of Baltimore Gas & Electric.
Safe Harbor, on the Susquehanna River, is a 421-megawatt hydroelectric station that began operating in 1931.
Initially, Pennsylvania Water & Power Corp. was the one-third owner of the facility.
Then in 1955, Pennsylvania Water & Power merged with PPL, passing along the stake.
Besides the stake in Safe Harbor, PPL also is divesting two generating plants fired by natural gas.
They are a 244-megawatt plant in Wallingford, Conn., and a 585-megawatt plant in University Park, Ill.
The transaction is expected to trigger an after-tax special charge of $65 million to $80 million against PPL's profits in the third quarter.
PPL spokesman George E. Biechler said the sale reflects the company's desire to have a bigger percentage of its revenues tied to its regulated businesses.
Earnings from those regulated businesses, such as its utilities, are more consistent than earnings from its unregulated businesses, such as its generating plants.
And of its generating plants, PPL wants to keep "base load" facilities that operate around the clock, such as its Susquehanna nuclear plant and its coal-fired plants.
So to shift its mix more toward the regulated side, PPL chose to divest some generating assets that it describes as "non-core."
PPL still will have hydro plants in its generation portfolio, Biechler noted.
These include Holtwood, Lake Wallenpaupack in Hawley, and sites in Montana and Maine.
Thursday's announcement is not linked to PPL's pending acquisition of E.ON U.S., Biechler said.
PPL said in April that it intends to buy E.ON U.S., parent company of Louisville Gas & Electric Co. and Kentucky Utilities, for $7.2 billion.
Biechler said it's "possible" that PPL might use some of the proceeds of the divestiture to help finance the acquisition, "but it's not critical," as PPL has taken other steps to fund the deal.