Capital Power acquires two LNG-fired power plants in U.S. for $1.1 bln
20/11/2023 22:33
Nov 20 (Reuters) - Canadian energy company Capital Power
CPX.TO said on Monday it was acquiring two U.S.-based natural
gas-fired generation facilities in California and Arizona for a
net cost of $1.1 billion.
Capital, like some of its rivals, is aiming to increase its
power generation through greenhouse gas emissions-free
renewables as well as more stable, but polluting energy sources
such as natural gas.
This month, Canadian rival TransAlta said it would acquire
Heartland Generation, which produces power from natural gas.
Following the completion of the deal, Capital will become
the fifth largest non-regulated gas-powered generator in North
America from ninth position. It plans to be net-zero emissions
by 2045.
The acquisition is expected to generate around $265 million
in core profit for the 2024-28 period, and is estimated to be 8%
accretive. The deal is expected to close in the first quarter of
2024
The La Paloma natural gas-fired generation plant in Kern
County, California has a capacity of 1,062 megawatts (MW) and is
owned by CXA La Paloma.
The Harquahala natural gas-fired generation facility in
Maricopa County, Arizona has a capacity of 1,092 MW, and is
owned by New Harquahala Generation Company, a newly formed and
equal-weighted partnership between Capital Power Investments and
a fund managed by BlackRock's Diversified Infrastructure
business.
"The acquisition of La Paloma and the partnership in
Harquahala offer an attractive entry point in the WECC (Western
Electricity Coordinating Council) market, are immediately
accretive and maintains our investment grade credit ratings and
balance sheet strength," said Sandra Haskins, CFO of Capital
Power.
Alberta-based Capital Power generates power from natural
gas, wind, solar and other sources at sites in Canada and the
United States. It has 62% of its capacity in Canada and 38% in
the U.S.
(Reporting by Seher Dareen in Bengaluru, Rod Nickel in
Winnipeg)
((Seher.Dareen@thomsonreuters.com; If in India call +91 74832
70128, if within U.S. call +1 646 223 8780;))