WABASH VALLEY POWER ACQUIRES WABASH RIVER UNIT 1

FROM DUKE ENERGY - 02/01/2007

Terre Haute, Indiana - Wabash Valley Power Association (WVPA) has purchased one unit of the Wabash River Power Station in West Terre Haute, Indiana, from Duke Energy Indiana. The purchase of Wabash River Unit 1includes the 192-megawatt gas turbine and 100-megawatt steam turbine, along with the unit’s associated equipment and property. WVPA provides all wholesale power to EnerStar Power.

Unit 1 was one of the nation’s first demonstrations of using coal gasification to produce

electricity. The facility produces electricity using synthetic gas from an adjacent coal gasification plant that is owned by sgSolutions, a subsidiary of WVPA. When the synthetic gas is unavailable, the unit can also run on natural gas.

"Wabash Valley Power Association has enjoyed a long history of partnerships with Duke Energy Indiana, including the joint ownership of substantial assets," said Wabash Valley Chief Executive Officer Rick Coons. "We see the acquisition of Wabash River Unit 1 as a continued growth of that relationship, while also satisfying the growing energy needs of our membership."

The purchase is part of WVPA’s long-term strategy to own a larger percentage of its sources of electric generation. "By owning more of our generation, we can provide a more reliable source of electricity to our member cooperatives, and provide more stable pricing," Coons added.

Duke Energy Indiana employees will continue to operate and maintain Unit 1 under a contract with WVPA. Duke’s remaining Wabash River Station units, which have the capacity to generate 668 megawatts, are not being sold.
 

"Our unit and Wabash Valley Power Association’s coal gasification plant are fully linked operationally, so it makes sense that these facilities are owned by the same company," said Duke Energy Indiana President Jim Stanley. "WVPA has done an excellent job operating the coal gasification plant since it became the owner."

The sale must be approved by the Indiana Utility Regulatory Commission, the Federal Energy Regulatory Commission, the Federal Trade Commission and the Department of Justice. These approvals are anticipated by mid-2007.

Wabash Valley Power Association is a generation and transmission cooperative based in Indianapolis that provides wholesale electricity to 28 distribution systems and their more than 800,000 retail customers in Indiana, Illinois, Michigan, and Missouri. In achieving its corporate goal of low-cost wholesale supply for its members, Wabash Valley manages a diverse mix of power supply options, including both plant ownership and wholesale market purchases. Wabash Valley is a founding member of ACES Power Marketing, one of the nation’s largest physical traders of electricity, and Touchstone Energy, the nationwide alliance of over 600 customer-owned electric cooperatives.