FPL buys Iowa nuke

today reached an agreement to buy a majority interest in the

, a 598-megawatt nuclear power plant located 15 miles northwest of

, from Interstate Power and Light (IP&L) a subsidiary of

.

Under the terms of the agreement, FPL Energy will purchase IP&L’s 70 percent interest in the Duane Arnold Energy Center for a total of approximately $387 million, including nuclear fuel, inventory and other items. Upon closing, FPL Energy will assume management and operation of Duane Arnold from Nuclear Management Company (NMC).

All of the power from FPL Energy’s share of the Duane Arnold Energy Center will be sold under a long-term contract to IP&L at a price of approximately $46 per MWh in 2006 escalating to approximately $61 per MWh in 2013.

FPL Energy expects to close the acquisition late in the fourth quarter 2005 or early in the first quarter 2006. The company expects the transaction to be immediately accretive to earnings per share, contributing $0.03 to $0.04 per share in 2006 and average accretion of about $0.04 per share through 2009.

FPL Energy is scheduled to file for a license extension for the plant in 2009, which, if approved, will enable the plant to continue to operate for an additional 20 years beyond its current license period of 2014.