AES shedding California biomass power businesses

In a terse statement this morning, AES (NYSE: AES) acknowledged that its wholly-owned subsidiary AES Central Valley is selling two biomass fired power plants in California to waste-to-energy giant Covanta.

The 50 MW Delano facility and the 25 MW Mendota facility, as well as an associated biomass fuels management company, will be transferred to Covanta for $51 million. 

“The sale of the central valley businesses reflects our commitment to portfolio management in our businesses,” said David Gee, AES Executive Vice President and President, North America region.

“While we are committed to growing our portfolio, including renewable generation assets such as biomass, this transaction represented a compelling opportunity to deliver value to our shareholders.”

The sale is subject to regulatory approvals and customary purchase price adjustments. The transaction is expected to be close in the third quarter of 2007.

AES is one of the world’s largest global power companies, with 2006 revenues of $12.3 billion. With operations in 27 countries on five continents, AES’s generation and distribution facilities have the capacity to serve 100 million people worldwide. It runs 121 generation facilities, employing 32,000 people.

Covanta owns and operates waste-to-energy and power generation projects. Its waste-to-energy facilities convert municipal solid waste into renewable energy for numerous communities, predominantly in the United States. Its 31 facilities can process over 43,800 tons of waste per day, producing 1,050 megawatts—or enough to power approximately 875,000 homes.

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