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Acquisition Will Move AES Into Wind Power

Arlington Firm Agrees to Buy SeaWest

By Justin Blum
Washington Post Staff Writer
Wednesday, January 12, 2005; Page E03

AES Corp., a worldwide power company based in Arlington, said yesterday that it has agreed to purchase a large wind power company as a way to meet growing demand for renewable energy.

The $60 million cash purchase of SeaWest Holdings Inc., which is contingent on regulatory approval, would mark AES's entry into the wind power-generation business. AES last year acquired a minority interest in a company that builds wind power facilities.

San Diego-based SeaWest Holdings, which generates 500 megawatts of power from wind turbines in three states, will be bought by AES Corp. (Ben Margot -- AP)

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The privately held SeaWest is based in San Diego and operates 500 megawatts of wind power projects in California, Oregon and Wyoming. According to the American Wind Energy Association, a Washington trade group, that would be enough to provide electricity to about 150,000 households.

Officials at SeaWest confirmed the details of the acquisition.

SeaWest, which AES described as the nation's sixth-largest wind power producer, is developing new wind projects in the West and Midwest, including a 120 megawatt project in Texas which AES plans to construct for $165 million.

AES officials said that as an increasing number of states mandate that a percentage of their electricity come from renewable sources, demand for wind power is growing.

"It represents us going where the growth is," said Ned Hall, AES's managing director of global development.

Analysts said that it made sense for AES, which operates in 27 countries, to broaden its energy sources but that doing so would not significantly boost profit.

"I think it's a very good purchase," said Christopher Ellinghaus, an analyst for Williams Capital Group of New York. "Will I necessarily notice it in earnings per share numbers? Probably not. Is it going to be profitable and add to the bottom line? Yes."

Ellinghaus, who said he owns shares of AES, said the purchase was the company's first significant expansion since recovering from setbacks on some foreign investments. The company had expanded heavily in Brazil beginning in the 1990s but the ventures faltered after the country's economic slump. That, combined with other problems, pushed AES into a financial crisis.

AES expects the purchase of SeaWest, which employs 175 people and was founded in 1982, to be completed by March. Shares of AES closed yesterday at $12.98, down 14 cents, or about 1 percent.

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