Sierra Pacific Power, a wholly-owned subsidiary of NV Energy, has entered into an agreement to sell its California electric distribution and generation assets to California Pacific Electric Co. (Calpeco), a newly-formed company jointly owned by Algonquin Power Income Fund and Emera Inc.
According to a report by Reuters, Algonquin said it will offer to employ all current operation and customer service employees at the California utility. IBEW Local 1245 represents both Physical and Clerical employees at Sierra Pacific Power, including those serving the 47,000 California-based customers in the Lake Tahoe area.
The purchase price, according to a Dow Jones news report, is $116 million cash. The transaction is expected to close in 2010.
Through Calpeco, Algonquin and Emera will seek debt financing for about half the purchase price of the California utility, with the balance being satisfied through equal equity contributions from Algonquin and Emera.
The California utility is expected to provide Algonquin and Emera future investment opportunities in regulated utility assets and development of renewable power generation given its location, according to the Reuters report.