Duke-American Transmission Co. (DATC) - a
Duke Energy Corporation
) and American Transmission Co. joint venture - has entered into
a purchase sale agreement with
Atlantic Power Corporation
). As per the agreement DATC will purchase Atlantic Power's stake
in the Path 15 transmission project including Atlantic Path 15
Transmission, LLC, Atlantic Holdings Path 15, LLC and Atlantic
Path 15, LLC for approximately $56 million.
ATLANTIC PWR CP (AT): Free Stock Analysis
DUKE ENERGY CP (DUK): Free Stock Analysis
HUANENG POWER (HNP): Free Stock Analysis
PG&E CORP (PCG): Free Stock Analysis
To read this article on Zacks.com click here.
Per the terms of the agreement, DATC will acquire a 72% interest
in the Path 15 transmission line. Pacific Gas & Electric, a
), has an 18% interest in the project through its ownership and
operation of the connecting Los Banos and Gates substations. The
remaining 10% interest is owned by Western Area Power
Administration, which will continue to operate and maintain the
Located in central California, the Path 15 transmission project
is an 84-mile, 500-kilovolt transmission line. The project was
placed into service in 2004 and since then it has maintained a
strong operating track record. The line is capable of providing
access to several California load centers.
With a capacity of approximately 1,500 megawatts of power, the
line is fully integrated into the California Independent System
Operator grid. Moreover, it plays an important role in
maintaining regional electric system reliability and market
Going forward, the deal will prove to be an important step for
the Duke Energy joint venture. The purchase will place DATC in a
favorable position in its commercial transmission business.
Subject to customary closing conditions and approvals, the deal
is expected to be closed in the second quarter of 2013.
Based in Charlotte, North Carolina, Duke Energy is a diversified
energy company with a portfolio of domestic and international,
natural gas and electric, regulated and unregulated businesses,
which supply, deliver, and process energy for customers in North
America and selected international markets.
Looking ahead, our bullish outlook for the company is supported
by its mega merger with Progress Energy Inc. thereby creating the
largest utility in the country, its strong balance sheet and
ongoing capital expansion projects. However, we remain concerned
about the present unfavorable macro backdrop, predominantly
fossil-fuel based generation assets, tepid demand for electricity
and pending regulatory cases. The company presently retains a
short-term Zacks Rank #3 (Hold).
In the near term, we would advise investors to accumulate Duke
Energy's short-term Zacks #1 Rank (Strong Buy rating) peer
Huaneng Power International, Inc.