Exelon Corporation has moved decisively into the clean energy market with its acquisition of John Deere Renewables, a leading operator and developer of wind power. The transaction will add 735 MW (operating) to Exelon's generation portfolio, as well as an additional 230 MW currently in advanced stages of development.
The acquisition, valued at approximately $860 million with a provision for up to an additional $40 million upon commencement of construction on the advanced development projects, is, says Exelon, an economically sound transaction that builds on the company's commitment to renewable energy as part of Exelon 2020, a business and environmental strategy to eliminate the equivalent of Exelon's 2001 carbon footprint. The company already claims to be the least carbon-intensive of the large US electric utilities, and this transaction marks its first entry into owning and operating wind projects. Exelon will finance the transaction using Exelon Generation debt.
Under the terms of agreement, Exelon will acquire John Deere Renewables' 735 MW of installed, operating wind capacity spread across 36 projects in eight states. Approximately 75 percent of the operating portfolio is already sold under long-term power purchase arrangements. As part of the acquisition, Exelon also has the opportunity to pursue 1468 MW of new wind projects that are in various stages of development, including the 230 MW mentioned above.
"We expect to see increasing demand for clean, efficient wind power at a national level and in the 29 states that already have a renewable energy standard," Rowe said. "This acquisition gives Exelon a strong position in the wind generation business that adds diversity to our generation fleet and provides more options for future growth."
The new acquisition will become part of the Exelon Power division of Exelon Generation, which already includes more than 1000 MW of owned and contracted renewable power, including hydroelectricity, wind, landfill gas and solar. Exelon expects to close the transaction with John Deere in the fourth quarter of 2010.
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