ARLINGTON, Va. November 5, 2014 – The AES Corporation (NYSE: AES) announced today that it has been awarded 20-year contracts by Southern California Edison (SCE), to provide 1,284 MW of combined cycle gas-fired generation and 100 MW of interconnected battery-based energy storage (equivalent to 200 MW of flexible energy storage resource). This new capacity will be built at the Company’s existing power plant sites in Huntington Beach and Long Beach, located south of Los Angeles, California.
“We are pleased to have won this very competitive bid and look forward to continuing to work with SCE to provide safe, reliable and sustainable energy solutions for California,” said Andrés Gluski, AES President and Chief Executive Officer. “These projects in Southern California will bring AES’ planned investments in new and improved capacity in the United States over the next five years to more than $3 billion, ensuring continued growth in our home market.”
These awards come as a result of SCE seeking a variety of new generating resources and creative energy solutions to replace the retired San Onofre Nuclear Generating Station and a number of older natural gas-fired power plants that are expected to retire in the near future to comply with California’s policy on the use of ocean water for cooling.
AES offered SCE a suite of energy solutions designed to modernize vintage power plants and bring the cleanest and best technology to Southern California. These new power solutions help support a low carbon, highly reliable grid that makes the most of California’s natural resources. AES continues to develop its existing Alamitos and Huntington Beach plants for the next generation's needs, including multi-dimensional facilities that supply efficient electricity, operate with enhanced flexibility for the integration of renewable energy sources, and serve as a platform for new power and water technologies.
“AES is providing innovative energy solutions designed to meet California’s long-term electricity needs and help to achieve its environmental goals,” said Ken Zagzebski, President of AES US. “By using advanced energy storage and modern combined cycle technology, we are laying the groundwork for a better, smarter and cleaner power grid.”
In addition to replacing older gas-fired plants with more efficient gas-fired capacity, SCE chose advanced energy storage as a cost effective way to ensure critical power system reliability in the Western Los Angeles Basin. This new storage resource will provide unmatched operational flexibility, enabling the most efficient dispatch of other generating plants, lowering cost and emissions and supporting the ongoing addition of renewable power sources.
For the gas-fired capacity, financing agreements are expected to be finalized in 2016, construction is expected to begin in 2017 and commercial operation is scheduled for 2020. For the energy storage capacity, commercial operation is scheduled for 2021.
AES is pursuing permits to build both the gas-fired and energy storage capacity, and will complete the licensing process before financial close. The total cost for these projects is expected to be approximately $1.9 billion, which will be funded with a combination of non-recourse debt and AES equity.
AES currently has a total of 3,941 MW of gas-fired capacity operating at its three Southland facilities: Alamitos (2,075 MW), Redondo Beach (1,392 MW) and Huntington Beach (474 MW). The capacity awarded by SCE will replace selected units at these existing sites. AES also expects to offer additional capacity at Alamitos and Huntington Beach into future solicitations, and is working on a plan that would allow the Company to retire all of the capacity at the Redondo Beach power plant, to revitalize the site into a residential and mixed use development.
About AES
The AES Corporation (NYSE: AES) is a Fortune 200 global power company. We provide affordable, sustainable energy to 20 countries through our diverse portfolio of distribution businesses as well as thermal and renewable generation facilities. Our workforce of 17,800 people is committed to operational excellence and meeting the world’s changing power needs. Our 2013 revenues were $16 billion and we own and manage $40 billion in total assets. To learn more, please visit www.aes.com. Follow AES on Twitter @TheAESCorp.
About AES Energy Storage
AES partners with industry leading utilities and power system operators to reduce costs, improve grid reliability, and achieve environmental goals using the AdvancionTM energy storage solution. AES manages the largest fleet of grid batteries in commercial service, with more than 200 MW of storage resources in operation and construction. The company has over 1,000 MW in development in the US and abroad. To learn more, please visit www.aesenergystorage.com or @aes_es on Twitter.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES’ current expectations based on reasonable assumptions.
Actual results could differ materially from those projected in AES’ forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in the Tender Offer Materials related to the Tender Offers and AES’ filings with the SEC, including, but not limited to, the risks discussed under Item 1A “Risk Factors” and Item 7 “Management’s Discussion Analysis of Financial Condition and Results of Operations” in AES’ 2013 Annual Report on Form 10-K and in subsequent reports filed with the SEC. Readers are encouraged to read AES’ filings to learn more about the risk factors associated with AES’ business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Anyone who desires a copy of AES’ 2013 Annual Report on Form 10-K dated February 26, 2014 may obtain a copy (excluding Exhibits) without charge by addressing a request to the Office of the Corporate Secretary, The AES Corporation, 4300 Wilson Boulevard, Arlington, Virginia 22203. Exhibits also may be requested, but a charge equal to the reproduction cost thereof will be made.
