Xcel Energy to sell $37m of Texas transmission assets to Sharyland

Xcel Energy (NYSE:XEL) subsidiary Southwestern Public Service (SPS) has entered into an agreement to sell $37m of transmission lines and substation facilities to Sharyland Distribution and Transmission Services.

The sale includes 66.5 miles of 345-kV transmission lines, two substations and other jurisdictional transmission facilities, all of which are located in Texas, according to an application filed on April 29 with FERC that requested approval of the disposition of the facilities.

According to the agreement, the transmission facilities include the Hobbs to Midland line, except for a small segment, and the Grassland to Borden line, except for a small segment. The substations in the sale are the Borden and Midland substations.

After the sale is complete, SPS will de-energize  the lines and substations and remove conductors and insulators to disconnect the facilities being sold from its transmission system. Sharyland plans to integrate the facilities into ERCOT on or after Jan. 1, 2014.

At closing, Sharyland will pay $37m plus the amount of any capital expenditures made by SPS during the period between the execution and the closing date, minus proceeds received by SPS from any insurance policies covering the assets, according to the agreement.

The transaction needs approval from FERC, the Public Utilities Commission of Texas and the New Mexico Public Regulation Commission.

If approved, the sale would close by the end of 2013, Xcel Energy said in its 10-Q filed May 2.  The companies struck the agreement on March 29.

Sharyland Distribution and Transmission Services was formed by the owners of Sharyland Utilities

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.