Calpine Corporation yesterday announced that it has agreed to purchase a nominal 809 megawatt, combined-cycle power plant and related plant inventory from Exelon Corporation for $530 million, or approximately $655 per kilowatt, subject to working capital adjustments.
The natural gas-fired plant is located in North Weymouth, Massachusetts, 12 miles southeast of Boston, and expands Calpine’s footprint in the New England competitive wholesale power market.
Calpine’s President and Chief Executive Officer Thad Hill, said:
“With the acquisition of Fore River, we will grow our presence in a region that features favorable fundamentals and a supportive, market-based regulatory philosophy. This modern, efficient power plant is dual-fuel capable, making it an excellent fit with our existing, reliable East Region fleet. We continue to redeploy our capital to enhance shareholder value through accretive acquisitions and divestitures, organic growth, balance sheet management and return of capital to shareholders through our share repurchase program.”
Built in 2003, Fore River Generating Station features two Mitsubishi 501G combustion turbines, two heat recovery steam generators and one Mitsubishi steam turbine. The plant’s dual-fuel capability enables it to run on either natural gas or fuel oil, depending upon market conditions.
Calpine expects the transaction to close in the fourth quarter of 2014 and intends to fund the transaction with cash on hand. The transaction is subject to customary closing conditions, antitrust review under the Hart-Scott-Rodino Act and FERC approval.
Calpine Corporation is America’s largest generator of electricity from natural gas and geothermal resources. Calpine Corporation has a fleet of 87 power plants in operation or under construction that represents approximately 26,000 megawatts of generation capacity.
We announced yesterday that Exelon Corporation and Pepco Holdings Inc. have filed an application seeking approval of their proposed merger with the Maryland Public Service Commission.