) has plans to acquire a combined-cycle power plant from MinnTex
Power Holdings, LLC for $625 million. The company expects to
close the deal with MinnTex Power Holdings, a private
equity-backed power company, in the first quarter.
BROOKFIELD INFR (BIP): Free Stock Analysis
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Located in Guadalupe County, near San Antonio, Texas, this
natural gas-fired plant has a generating capacity of 1,050
megawatt (MW). On a 110-acre site, this Guadalupe plant includes
two 525 MW generation blocks, each having two GE 7FA combustion
turbines, two heat recovery steam generators and one GE steam
turbine. If market conditions permit, this transaction also
includes the rights to an advanced development opportunity for an
approximately 400 MW quick-start, natural gas-fired peaker.
With this acquisition, Calpine will be able to expand its
generation capacity in Texas where demand for electricity is
continuously rising. State regulatory authorities have also taken
a number of steps to push the development of new power plants.
However, a state legislator warned the Texas Public Utility
Commission to slow down on proposed market changes.
Regulators also stated that although the state requires more
peaking units which can be set up speedily, the units need to
operate only at times of rising power demand in order to
compensate for falling wind generation. In this scenario, Calpine
as well as other power plant owners expressed their unwillingness
for the proposal as they believe that the economics of the
existing Texas market does not justify new construction under
Calpine's latest deal to buy the Guadalupe power plant follows a
$432 million plant acquisition in Central Texas last year and two
expansions in the Houston area that will add about 520 MW to its
power capacity in the state next year.
Calpine Corp. generates more electricity than any other
independent power producer in America, with a fleet of 93 power
plants in operation or under construction, representing more than
28,000 MW of generation capacity.
Currently, the company is in the midst of several vital projects,
including a combined-cycle project in Delaware, a fossil fuel
steam-based power plant called Deepwater Energy Center, and
expansion of the Mankato Power Plant and Los Esteros critical
Calpine Corp. currently has a Zacks Rank #3 (Hold). However,
better placed stocks in the space that are worth considering
include Zacks Ranked #2 (Buy)
Brookfield Infrastructure Partners L.P.
Alliant Energy Corporation