Five Power Plants to Change Hands in Four Separate Deals

Within the space of less than a week, four deals have been announced that will result in ownership changes at five power plants in the U.S. Northeast.

Calpine Corp. announced on Oct. 13 that it has agreed to acquire the Granite Ridge Energy Center, a 745-MW combined cycle gas-fired power plant located in Londonderry, N.H., from Granite Ridge Holdings LLC for $500 million.

The plant-which includes two Siemens 501G combustion turbines, two heat recovery steam generators, and one steam turbine-will add to the Houston-based company's fleet of 83 power plants located in 18 states and Canada. Calpine says it is America's largest generator of electricity from natural gas and geothermal resources, with nearly 27 GW of generation capacity.

"With the addition of Granite Ridge, our footprint in New England will comprise approximately 2,000 megawatts of reliable and environmentally responsible generation resources, making us a meaningful supplier in one of the nation's leading wholesale power markets," said Calpine President and CEO Thad Hill.

On Oct. 8, The Carlyle Group said that it agreed to acquire the Rhode Island State Energy Center (RISEC)-a 583-MW combined cycle gas-fired power plant located in Johnston, R.I. (Figure 1)-from a subsidiary of Entergy Corp. for $490 million. The acquisition will increase the size of Carlyle's power generation portfolio to 18 plants, totaling more than 4,900 MW of capacity. Entergy only owned the facility for a few years, having purchased it from a subsidiary of NextEra Energy Resources LLC in December 2011 for $346 million.

1. The Rhode Island State Energy Center. RISEC is a natural gas-fired, combined-cycle generating plant that entered commercial service in 2002. Courtesy: Entergy Corp.

"Our strategy for [Entergy Wholesale Commodities] is focused on being disciplined about reducing risk and freeing up financial resources for other opportunities," said Entergy Chairman and CEO Leo Denault. "RISEC has been a very good investment for us, and its sale is consistent with that strategy."

Also on Oct. 8, Talen Energy Corp. announced that it would sell its 778-MW Ironwood combined cycle power plant in Lebanon, Penn., to TransCanada Corp. for $654 million. TransCanada is probably best known for its natural gas pipeline network-which includes more than 42,000 miles of pipeline and which transports roughly 20% of all natural gas consumed in North America-and for its involvement in the proposed Keystone XL pipeline. But the company also owns or has interests in more than 10,900 MW of power generation capacity in the U.S. and Canada.

"The Ironwood power plant will be very complementary to our U.S. northeast operations, which now total over 4,500 MW, and is consistent with our disciplined approach to growth in this important region where we have been operating on the power side since 1998," said William (Bill) Taylor, TransCanada's executive vice-president and president, energy.

Talen Energy wasn't done there, however. The company-formed on June 1 when PPL Corp. spun off its PPL Energy Supply business and combined it with RJS Power Holdings, a competitive power generation business owned by affiliates of Riverstone Holdings LLC-also announced that it would sell the Holtwood and Lake Wallenpaupack hydroelectric projects to a subsidiary of Brookfield Renewable Energy Partners L.P. for $860 million.

Brookfield Renewable's generation portfolio is made up primarily of hydroelectric plants. The company says it has more than 7,000 MW of installed capacity across 75 river systems and 14 power markets in North America, Latin America, and Europe. The 252-MW Holtwood station is located on the Susquehanna River about eight miles downstream from Brookfield Renewable's 417-MW Safe Harbor facility. The 40-MW Wallenpaupack station is located on Lake Wallenpaupack in the Pocono Mountains.

"These high-quality assets provide a unique opportunity to leverage our operating platform and hydroelectric expertise in a market facing significant coal retirements and increasing reliance on renewables," said Sachin Shah, CEO of Brookfield Renewable.

Talen Energy had been buying power plants earlier this year, but the three plants being sold in these deals are part of a requirement to divest of certain assets in specific regions of the PJM Interconnection to comply with a December 2014 Federal Energy Regulatory Commission order approving the transactions that formed the company. All of the deals are expected to close in the first quarter 2016.

-Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)

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