NACHUSA – Duke Energy announced plans this week to sell all 13 of the power plants in its Midwest generation business, including the Lee Energy Facility near Nachusa.
The announcement came after a Duke rate hike request was denied in Ohio. Other plants to be sold are in Ohio and Pennsylvania.
The company’s CEO, in a news release, said Duke’s commercial power segment has been hurt by price volatility on the wholesale market. Cheap natural gas and lower demand, largely attributed to the recession, have cut wholesale prices nearly by half since 2008.
“This earnings profile is not a strategic fit for Duke Energy, and we have begun a process to exit the business,” Duke CEO and President Lynn Good said in the release. “We will be working closely with employees and community leaders during this transition to ensure a smooth process.”
John Thompson, president and CEO of the Lee County Industrial Development Association, said he had just found out about Duke’s plans Monday through the same news release that was sent to the media.
“Local officials haven’t had any conversations with the company yet,” Thompson said. “We really don’t know how far down the road they are on it.”
Duke built the 640-watt natural-gas-fired facility and brought it online in June 2001. Power produced at the Duke Midwest plants is sold through the PJM energy market.
The plant is Lee County’s largest taxpayer, paying about $300,000 a year into the county treasury.
Regardless of who the new owner is, no drastic operating changes are expected, Thompson said. The plant employs only four people, he said, but they are good-paying jobs.
“We don’t anticipate there being any real concerns,” Thompson said. “This plant is a good generating asset, and it’s well maintained. It’s just a matter of having a different name on the property.”
The time frame given for a transfer to new ownership is 12 to 18 months, but the company said the sale is in its early stages.
“This is just the announcement of the company’s sale plans,” said Duke spokeswoman Tammie McGee. “We have no buyers yet, but this is how long we expect the process to take.”
Companies have in the past expressed an interest in Midwest generating plants, but Duke is not negotiating with anyone yet, McGee said. The plants could be parceled off separately, she said, but the company would prefer to sell them together.
Six of the 13 plants to be sold are fueled by natural gas; the others operate on oil or coal. Only the gas-fired plants are solely owned by Duke.
“With the regulatory problems involved with coal, the plants that run on natural gas are the most valuable assets,” Thompson said.