By October 8, 2015 Read More →

TransCanada buying Pennsylvania natural gas power plant in midst of Marcellus

TransCanada says Ironwood is high efficiency, combined cycle power plant that fits well with NE Coast expansion plans

power plant

TransCanada Corporation

TransCanada Corporation has announced that it has reached an agreement to acquire the Ironwood natural gas-fired, combined cycle power plant in Lebanon, Pennsylvania, with a nameplate capacity of 778 megawatts (MW), from Talen Energy Corporation for US$654 million.

At closing, US$42 million in debt will be assumed and then repaid within 45 days of closing out of funds placed into escrow by the seller.

“This acquisition presents a unique opportunity in the current market environment and is a natural extension of our U.S. northeast power business, strengthening our overall portfolio of assets in the region,” said Russ Girling, TransCanada’s president and chief executive officer.


Russ Girling, TransCanada CEO.

“This relatively new and highly efficient gas-fired power plant provides us with a solid platform from which to continue to grow our already substantial wholesale, commercial and industrial customer base in this market area.”

The Ironwood power plant delivers energy into the PJM power market, North America’s largest and most liquid energy region.

Strategically located in proximity to the Marcellus shale gas play, the facility is well positioned to access competitively priced natural gas in a market that is in the midst of transitioning away from coal-fired power generation to gas, TransCanada said in a press release.

The company says the acquisition is expected to be immediately accretive to earnings and cash flow and generate approximately US$90-$110 million in earnings before interest, taxes, depreciation and amortization annually through a combination of capacity payments and energy sales.

“The Ironwood power plant will be very complementary to our U.S. northeast operations, which now total over 4,500 MW, and is consistent with our disciplined approach to growth in this important region where we have been operating on the power side since 1998,” said Bill Taylor, TransCanada executive vice-president and president, Energy.

The acquisition will be financed with a combination of cash on hand and available debt capacity.

The transaction is expected to close early in the first quarter of 2016, subject to certain conditions being satisfied in the coming months.

Posted in: Energy Financial

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