News Room

December 20, 2006
FPL Energy announces agreement to purchase Point Beach Nuclear Power Plant

JUNO BEACH Fla. - FPL Energy, LLC, a subsidiary of FPL Group, Inc. (NYSE: FPL) announced today it has reached an agreement to purchase the two-unit, 1,033-megawatt Point Beach Nuclear Power Plant located near Two Rivers, Wisconsin, about 30 miles southeast of Green Bay, from Wisconsin Electric Power Company (dba as We Energies), a subsidiary of Wisconsin Energy Corporation (NYSE: WEC).

Under the terms of the agreement, a wholly-owned subsidiary of FPL Energy will purchase the Point Beach Nuclear Power Plant for a total of approximately $998 million, including nuclear fuel, inventory and other items. The $998 million price represents $783 million for the plant itself and $215 million for fuel, inventory and other items.

Upon closing, FPL Energy will assume management and operation of Point Beach from Nuclear Management Company and will work with them to ensure a smooth transition.

Jim Robo, president and chief operating officer of FPL Group, said, “We are excited to add the Point Beach Nuclear Power Plant to our power generation portfolio and pleased to further expand our relationship with We Energies, an important customer for whom we’ve been providing clean, renewable wind power for several years.

“This plant will further diversify our generating fleet and supports our strategy of building a diversified, well-hedged portfolio. Point Beach provides us with another low-cost, emission-free, baseload generation source in the Midwest and complements our existing nuclear and wind assets in the region.”

All of the power from the Point Beach Nuclear Power Plant will be sold under a long-term contract to We Energies through the current NRC license terms of 2030 for Unit 1 and 2033 for Unit 2. The power from Point Beach is competitively priced and escalates each year of the contract.

FPL Energy will assume responsibility for eventual decommissioning of the plant. Decommissioning funds transferred to FPL Energy at closing will be no less than $360 million. We Energies will retain the non-qualified nuclear decommissioning trust.  We Energies has the option to transfer more than $360 million to FPL Energy for an additional purchase price adjustment.

FPL Energy expects to close the acquisition in the third quarter of 2007. Financing for the acquisition will be integrated into FPL Group’s overall financing program with a continued commitment to strong credit quality. The acquisition is expected to be immediately accretive to earnings per share in the first three years, and increasingly so thereafter.

Point Beach is comprised of two pressurized water reactors totaling 1,033 megawatts of capacity. Point Beach Unit 1 began commercial operation in December 1970; Unit 2 in March 1973. In December 2005, the U.S. Nuclear Regulatory Commission renewed the operating licenses for Units 1 and 2 through 2030 and 2033, respectively (20-year extensions). The plant is in good material condition. The reactor vessel heads and steam generators have been replaced in both units.

The Point Beach Nuclear Power Plant currently has approximately 660 full-time employees.  FPL Energy has agreed to retain non-bargaining unit employees at Point Beach at comparable wages and benefits for 18 months following the close of the sale. In addition, FPL Energy will honor all labor agreements for bargaining unit employees.

“FPL Energy has been a member of the Wisconsin community for several years through our ownership and operation of our Montfort Wind Energy Center. We have a strong track record of community involvement and giving back to the communities where we operate. We look forward to developing new opportunities and partnerships due to our ownership of Point Beach,” said Robo.

Approvals for the transaction are needed from federal and state regulatory agencies, including the Nuclear Regulatory Commission, the Public Service Commission of Wisconsin as well as the Federal Energy Regulatory Commission, Department of Justice clearance under the Hart Scott Rodino Antitrust Improvements Act of 1976 and various other regulatory bodies.

FPL Energy will utilize the experience of the Point Beach team, as well as the experience gained operating the 592-megawatt Duane Arnold Energy Center in Iowa, the 1,220-megawatt Seabrook Station in New Hampshire, and the expertise of the FPL Group nuclear team to manage and operate the plant.

The addition of Point Beach will nearly double FPL Energy’s owned power generation in the Midwest. The company currently owns and operates more than 660 megawatts of wind power throughout Wisconsin, Iowa, North Dakota, South Dakota, Minnesota, and Kansas. In addition, FPL Energy owns a majority interest in the Duane Arnold Energy Center and operates the plant.

In addition to the Duane Arnold nuclear plant in Iowa, FPL Energy currently operates and owns a majority interest in the Seabrook nuclear plant in New Hampshire. FPL Group’s other subsidiary, Florida Power & Light Company, operates four nuclear units in Florida at two sites, Turkey Point and St. Lucie, representing 1,386 megawatts and 1,678 megawatts, respectively.

Seabrook, Duane Arnold, Turkey Point and St. Lucie have traditionally ranked among the highest in safety and operational performance based upon the Nuclear Regulatory Commission’s safety indicators as well as the World Association of Nuclear Operators’ overall performance index.

“FPL Group’s Nuclear Division has an excellent track record operating nuclear power plants safely and reliably,” said Art Stall, senior vice president of FPL Group’s Nuclear Division. “FPL Group and Point Beach nuclear programs are focused on safety and continuous improvement. We look forward to working with Point Beach employees in further providing safe, clean and reliable nuclear power to the Wisconsin market for many years to come.”

FPL Energy also announced today that it was providing two wind energy options for We Energies. The first allows We Energies to select FPL Energy to equip and construct the We Energies Blue Sky Green Field Wind Project in northeastern Fond du Lac County. This project is currently under regulatory review. The second option allows We Energies to acquire a site under development by FPL Energy in central Wisconsin. We Energies may exercise either of these options independent of the sale of Point Beach.

FPL Energy was advised by J.P. Morgan Securities Inc. as exclusive financial advisor, and represented in the transaction by Pillsbury Winthrop Shaw Pittman, LLP.

 

FPL Group has scheduled a conference call for 9 a.m. ET on Wednesday, Dec. 20, 2006 to discuss the transaction. The webcast is available on FPL Group’s website by accessing the following link, http://www.FPLGroup.com/investor/contents/investor_index.shtml.  The slides accompanying the presentation may be downloaded at www.FPLGroup.com beginning at 7:30 a.m. ET today.   For persons unable to listen to the live webcast, a replay will be available for 14 days by accessing the same link as listed above.