Southern Power, a leading U.S. wholesale energy provider and subsidiary of Southern Company, announced that it has entered an agreement to sell the Mankato Energy Center to Xcel Energy for $650 million.

Mankato, a natural gas combined-cycle generation facility, will have a maximum capacity of approximately 760 megawatts upon completion of an ongoing expansion project. The completion of the sale, subject to regulatory approval and other closing conditions, is expected to be mid-2019.

"The Mankato Energy Center is a valuable part of the local community and the regional energy infrastructure," said Southern Power President and CEO Mark Lantrip. "This transaction is a great opportunity to deliver value for the benefit of Southern Company shareholders."

Proceeds from this transaction will be used to strengthen the balance sheet of Southern Company and position Southern Power to continue providing clean, safe, reliable and affordable wholesale energy to its customers across the U.S, including the expansion of one of the nation's largest carbon-free renewable energy portfolios.

Barclays is serving as the financial advisor and Baker Botts is serving as primary legal counsel to Southern Power.