TransCanada buys a plant only to sell it six weeks later


Six weeks ago, TransCanada Corp.closed a deal to buy a power plant in Pennsylvania.
On Friday, the company put it back up for sale.
The 704-megawatt Ironwood natural gas-fired power complex that TransCanada bought for $657 million from Talen Energy Corp. is back on the block as the company looks for ways to finance another acquisition worth 15 times more. In fact, the company’s putting a whole set of U.S. Northeast power assets up for sale to help pay for its $10.2 billion purchase of Columbia Pipeline Group Inc., announced the same day. It’ll also divest a stake in its Mexico gas business.
TransCanada’s turnaround highlights the winners and losers of America’s shale gas boom. A U.S.-wide glut of the fuel is hurting merchant power generators by dragging down wholesale electricity prices while giving so-called midstream operators a reason to build more pipelines.

Removing Power
“This will remove the majority of merchant power from our portfolio,” Don Marchand, TransCanada’s chief financial officer, said on a conference call to discuss the Columbia acquisition, referring to plants that rely on wholesale electricity markets for their profits. “Advisers have been engaged and this process is under way.”
In addition to Ironwood, TransCanada plans to sell its Ravenswood gas- and oil-fired generation plant in New York, hydroelectric power assets in New England, the Kibby wind power operation in Maine and Ocean State Power gas generation facilities in Rhode Island, Marchand said. Big Allis, as Ravenswood is known to New Yorkers who can best see its stacks along the East River from the Queensboro Bridge, was purchased by TransCanada in 2008 for $2.9 billion.
In a statement, TransCanada president and CEO Russ Girling praised the deal to take over Columbia Pipeline as “a rare opportunity.” He was the same executive who, just months earlier, called the Ironwood buy “a unique opportunity.”

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