Legal & Regulatory

More Power Plants Changing Hands: Duke, Exelon, Calpine Involved

Calpine Corp. has its hands in two deals with large power companies—selling a plant to Duke Energy in Florida while buying a plant from Exelon Corp. in Massachusetts.

On Aug. 25, Calpine announced that it has agreed to buy Exelon’s 809-MW Fore River Generating Station, which is located about 12 miles southeast of Boston, for $530 million. Acquisition of the natural gas-fired, combined cycle plant will expand the company’s footprint in the New England wholesale power market.

The plant was built in 2003 and features two Mitsubishi 501G combustion turbines (CTs), two heat recovery steam generators (HRSGs), and one Mitsubishi steam turbine. It has dual-fuel capability, so can operate on fuel oil if market conditions warrant. Calpine says it will pay cash in the deal, which is expected to close in the fourth quarter of 2014.

“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,” said Calpine’s President and CEO Thad Hill.

The next day, Duke Energy told the Florida Public Service Commission (FPSC) that it has reached a deal with Calpine to purchase the company’s 537-MW Osprey Energy Center, a natural gas-fired, combined cycle generating facility located in Auburndale, Fla. The FPSC confirmed that the acquisition is still being negotiated, but that it will defer Duke’s Suwanee uprate project to give Calpine and Duke time to discuss their proposed agreement.

The Osprey plant began commercial operation in May 2004 and also has two CTs that are routed to two HRSGs, which provide steam to a single steam turbine. The plant utilizes Siemens Westinghouse equipment.

“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,” Hill said in the Fore River announcement.

Calpine has approximately 26 GW of generation capacity in operation or under construction. The majority of its facilities are in the Northeastern U.S., Texas, and California, so purchasing a plant in Massachusetts and selling one in Florida meshes with its current focus.

Plant ownership changes seem to be in vogue recently. Just last week, Dynegy Inc. announced two separate agreements to acquire generation assets from Duke and Energy Capital Partners. Those deals included a total of 12,313 MW of coal and gas generation in Connecticut, Illinois, Massachusetts, Ohio, and Pennsylvania.

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

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