SRP to purchase part of Sempra power plant

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Salt River Project (SRP) has agreed to purchase part of Sempra U.S. Gas & Power's Mesquite Power natural gas fired power plant. The agreement is for one 625 MW block of Sempra's 1,250 MW Mesquite power plant for $371 million.

Both sides are pleased with the arrangement.

The sale will allow Sempra to reduce its exposure to the merchant power markets and redeploy capital to expand further into the natural gas sector.

The purchase represents future growth for SRP despite current growth which has been slow.

"We studied the market very carefully and determined that this purchase would provide an economic benefit to SRP and its customers," said SRP General Manager Mark Bonsall. "Load growth is relatively small right now, but when it returns, this plant will position us well in the long term to meet our customers' needs at a reasonable cost."

The sale is awaiting approval from the Federal Energy Regulatory Commission among other regulatory agencies.

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