The sellers pre-existing decommission funds will be transferred to Constellation, who will take responsibility for all future decommissioning funding. Central Hudson is a wholly owned subsidiary of CH Energy Group, Inc. The Long Island Power Authority, an 18 percent owner of Nine Mile 2, is not participating in the sale. The sale is consistent with an April New York State Public Service Commission order urging the owners to determine the market value of the plants through an open, competitive process. Department of Public Service staff participated in the auction process.
All payments are subject to purchase price adjustments at the time of closing.
Also part of the transaction is a purchase power agreement calling for Constellation Nuclear to provide electricity to the sellers at negotiated competitive prices for approximately 10 years. After the completion of the purchase power agreement a revenue sharing agreement begins, which will provide a hedge against electricity price increases and could provide the sellers additional future revenue through 2021. Both the purchase power agreement and the revenue sharing agreement are based on plant output. The sale of the plants furthers the state s initiative to separate electricity generation from transmission and distribution, said Niagara Mohawk chairman and chief executive officer William E. Davis, speaking on behalf of the selling utilities. The sale also protects customers and shareholders from unforeseen operating and decommissioning costs.