The Salt River Project Agricultural Improvement and Power District has agreed to purchase one 625-megawatt block of Sempra Energy’s 1,250-megawatt Mesquite Power natural gas-fired power plant located in Arizona for $371 million, according to the San Diego utility.

The agreement is subject to approval from the Federal Energy Regulatory Commission and other regulatory agencies.

At its November meeting, the SRP board of directors approved a proposal for 100 percent ownership of one 625-megawatt block of power and a 50 percent undivided interest in the infrastructure facilities shared by the two blocks, according to a news release.

Mesquite Power, in operation since 2003 in Arlington, Ariz., is made up of two 625-megawatt power blocks. Each block is made up of one steam turbine and two gas turbines. Under terms of the agreement, SRP will also become the operator of both blocks.

“This strategic sale comes at the right time for Sempra U.S. Gas and Power as we continue to reduce our exposure to the merchant power markets, while also allowing us to put greater emphasis on growing our southeast natural gas portfolio,” said Jeffrey W. Martin, president and CEO of Sempra U.S. Gas & Power. “This transaction will enable us to redeploy capital to expand our growing presence in the natural gas sector.”

SRP is the largest supplier of raw water and electricity to the Phoenix metropolitan area, according to the utility.

Sempra U.S. Gas & Power is a subsidiary of Sempra Energy.

— SDBJ Staff Report