EPCOR Power L.P. and EPCOR Power Equity Ltd. announce agreement to acquire Morris Cogeneration LLC



    EDMONTON, Sept. 11 /CNW/ - EPCOR Power L.P. (TSX: EP.UN) (the
Partnership) and EPCOR Power Equity Ltd. (TSX: EPP.PR.A) (the Corporation), a
subsidiary of the Partnership announced today that a definitive agreement has
been signed to acquire 100 per cent equity interest in Morris Cogeneration LLC
(Morris facility) from Diamond Generating Corporation and MIC Nebraska, Inc.,
both wholly-owned subsidiaries of Mitsubishi Corporation. The acquisition
price is U.S. $77 million, subject to closing adjustments.
    The Morris facility is a 177 megawatt (MW) natural gas-fired cogeneration
facility located on Equistar Chemicals LP's (Equistar) chemical plant in
Morris, Illinois, near Chicago. The facility began commercial operations in
1998. All of the steam and a portion of the electricity produced from the
facility are sold to Equistar under the terms of a long-term energy services
agreement which expires in 2023. Equistar, a wholly-owned subsidiary of
Lyondell Chemical Company, produces ethylene and its co-products and
derivatives including polyethylene plastic, at the Morris facility. The Morris
facility also has an electric capacity agreement with Exelon Generation
Company, LLC that terminates in 2011, for capacity and electricity in excess
of the needs of Equistar and can participate in the PJM (Pennsylvania, New
Jersey, and Maryland) market.
    "The acquisition of the Morris facility is an excellent strategic fit and
is expected to be modestly accretive to cash flow," said Brian Vaasjo,
President of the General Partner of EPCOR Power L.P. "This facility combines
the off-gas normally generated by the Equistar production process with natural
gas, and efficiently combusts the mixture to simultaneously cogenerate steam
and electricity, very similar to other EPCOR operated facilities. We
understand the technology utilized by this plant, we support the efficiencies
attributable to cogeneration, and we propose to add value to the Morris
facility by leveraging on the Partnership's operating expertise and
capitalizing on growth opportunities within the highly developed geographical
area."
    The transaction is expected to close in the fourth quarter of 2008,
subject to certain closing conditions, expiration of applicable waiting
periods under the Hart-Scott-Rodino Antitrust Improvements Act and consent by
a third party. The third party also has a Right of First Refusal.
    Further details of the acquisition will be provided at closing. It is
expected the purchase price of the acquisition will be temporarily financed
under the Partnership's existing credit facilities with permanent financing to
be arranged after the close of the transaction.

    About EPCOR Power L.P.

    Established in 1997, EPCOR Power L.P. is a limited partnership organized
under the laws of the Province of Ontario. The Partnership's portfolio
consists of 19 wholly-owned power generation assets located in Canada and the
United States, a 50 per cent interest in a power generation asset in
Washington State, and a 15.4 per cent interest in Primary Energy Recycling
Holdings LLC (PERH). The Partnership's assets have a total net generating
capacity of 1,287 megawatts and more than three million pounds per hour of
thermal energy. PERH wholly owns four recycled energy assets in the United
States with an aggregate generation capacity of 283 megawatts and nearly two
million pounds per hour of thermal energy, and has a 50 per cent interest in a
pulverized coal facility. EPCOR USA Ventures LLC, formerly Primary Energy
Ventures LLC, a wholly-owned subsidiary of the Partnership, manages and
operates these facilities for PERH. For more information on the Partnership,
please visit: www.epcorpowerlp.ca.

    About EPCOR Power Equity Ltd.

    The Corporation was incorporated under the laws of the Province of
Alberta on June 26, 1998 and is a wholly-owned subsidiary of the Partnership.
The Corporation operates as a holding company and indirectly holds all of the
Partnership's business and power generation and other assets in the United
States, including the Partnership's Castleton, Curtis Palmer, Manchief,
Frederickson, Naval Station, North Island, Naval Training Center, Oxnard,
Greeley, Kenilworth, Roxboro and Southport power generating facilities. These
facilities have a total generating capacity of approximately 977 megawatts
(representing approximately 75 per cent of the total generating capacity of
the Partnership's assets) and approximately three million pounds per hour of
thermal energy (representing 100 per cent of the total thermal energy capacity
of the Partnership's assets). In addition, the Corporation holds, through a
wholly-owned subsidiary, the Partnership's overall 15.4 per cent equity
interest in PERH.

    Forward-looking Information

    Certain information in this news release is forward-looking and related
to anticipated financial performance, events and strategies. When used in this
context, words such as "will", "anticipate", "believe", "plan", "intend",
"target", and "expect" or similar words suggest future outcomes. By their
nature, such statements are subject to significant risks, assumptions and
uncertainties, which could cause the Partnership's actual results and
experience to be materially different than the anticipated results. The
Partnership's expectation that the Morris facility transaction will be
accretive to cash flow is subject to risks including its ability to
successfully integrate and realize the financial benefits of the acquisition,
the availability and price of energy commodities, the performance of
counterparties in meeting their obligations under purchase and supply
agreements, plant availability and performance, regulatory and government
decisions, the future cost of permanent financing and competitive factors in
the power industry. The ability of the Partnership to add value to the Morris
facility is subject to risks including the Partnership's ability to
successfully integrate and realize the financial benefits of the acquisition,
the ability to retain and hire staff with expertise in the power industry, the
availability and price of energy commodities, competitive factors in the power
industry and the current and future economic conditions in North America. The
expectation regarding the form of financing of this transaction is subject to
risks of ongoing compliance by the Partnership with its current debt
covenants, future developments within North American capital markets and the
availability of permanent financing.
    The material factors and assumptions used to develop these forward
looking statements include management's analysis and due diligence of the
Morris facility, including the related purchase and supply agreements, and the
Partnership's assessment of commodity and power markets, the markets in which
the Morris facility operates, and the state of the capital markets.
    Readers are cautioned not to place undue reliance on forward-looking
statements as actual results could differ materially from the plans,
expectations, estimates or intentions expressed in the forward-looking
statements. Except as required by law, the Partnership disclaims any intention
and assumes no obligation to update any forward-looking statement.





For further information:

For further information: Media inquiries: Tim LeRiche, (780) 969-8238;
Unitholder and analyst inquiries: Randy Mah, (780) 412-4297, (866) 896-4636
(toll-free)

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EPCOR POWER L.P.

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