The Loy Yang B power station forms a part of the Loy Yang Complex located in Victoria's Latrobe Valley. The station consists of two 500 megawatt units, the first of was completed in 1993 and the second commenced operating in January 1996.
In December 1992, during the construction of the power station, the State Electricity Commision of Victoria (SECV) sold a 51 per cent interest in Loy Yang B to the private sector operator, Mission Energy Australia Pty Ltd. This company was affiliated with Mission Energy of North America. Mission Energy's share in Loy Yang B was held through a group of wholly-owned subsidiaries, collectively referred to as the Latrobe Power Partnership.
The SECV's remaining 49 per cent interest in Loy Yang B was purchased by a State-owned company, Loy Yang B Power Station Pty Ltd (LYBCO), which became a wholly-owned subsidiary of PowerNet Victoria following the disaggregation of the SECV. In December 1996, Edison Mission Energy Holdings Pty Ltd (EME), formerly known as Mission Energy Australia Pty Ltd, approached the State Government with an offer to acquire the State's 49 per cent interest in Loy Yang B through the purchase of the shares or the assets of LYBCO.
In April 1997, the State Government announced the sale of the State's 49 per cent interest in the Loy Yang B power station to EME.