Exelon Acquires Wolf Hollow Assets

Exelon Corporation (EXC - Analyst Report), yesterday, acquired Wolf Hollow, a combined-cycle natural gas-fired power plant, for a price of $305 million.

The acquisition of Wolf Hollow adds about 720 megawatts of clean energy to Exelon Generation’s portfolio in the competitive Electric Reliability Council of Texas (ERCOT) power market. The addition of this efficient combined-cycle natural gas-fired plant to Exelon’s ERCOT portfolio will generate long-term value for the company.

The acquisition will also enhance Exelon Generation’s strong and growing fleet in Texas, which now includes a total capacity of 3,132 megawatts at multiple plants.

In addition to strengthening Exelon’s position in the Texas power market, the Wolf Hollow acquisition demonstrates its continued commitment to clean energy in competitive markets. The Wolf Hollow acquisition will enable Exelon to further build on its plans to invest nearly $5 billion in cost-effective, clean energy projects over six years and help eliminate the equivalent of its 2001 carbon footprint.

Exelon expects the transaction to be accretive to free cash flow beginning in 2012. The acquisition also eliminates the existing power purchase agreement between Exelon and Wolf Hollow to purchase 350 MW of output through 2023 at above current observable market power prices.

Based in Chicago, Illinois, Exelon Corporation, a utility services holding company, engages in the generation, transmission, distribution and sale of electricity to residential, commercial, industrial and wholesale customers.

Exelon Corporation currently retains a Zacks #3 Rank (short-term Hold rating). We maintain a longer-term Neutral recommendation on Exelon. The company competes with Ameren Corporation (AEE - Analyst Report) and PPL Corporation (PPL - Analyst Report).

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