Carlyle Group acquires Red Oak plant from Energy Capital Partners; Tenaska acquires U.S. Power Generating Co.; Southern California Edison floats $1.6 billion in bonds in three tranches; Energy Trading Partners issues $1.5 billion in bonds; plus debt issues by ONEOK, Spectra Energy, TVA, MidAmerican, PECO, and Duke, totaling $9.2 billion.
Constellation and EdF transfer nuclear licenses to Exelon for $400 million; NRG closes $244 million acquisition of Gregory cogen plant in Texas; Vivint Solar secures $200 million for rooftop solar leases; Virginia Power floats $585 million in bonds; Southern Company issues $700 million; plus equity deals totaling $844 million and debt issues totaling $3.635 billion.
TECO acquires New Mexico Gas; Direct Energy acquires Bounce Energy; Duke floats $500 million in two tranches; plus debt deals from PPL Electric and Southern Power.
Entergy Mississippi to spin off its transmission business to ITC; Calpine acquires Bosque Power merchant plant in Texas; WPS acquires Fox Energy plant; E.On buys interest in Magic Valley wind farm; plus bond issues by Nstar, Western Mass. Electric, Texas Eastern Transmission, Alabama Power, and NSP totaling $1.55 billion.
Exelon sells plants in Maryland and Cali; Mitsui buys into Viridity; Duke issues $1.2B; plus deals at TVA, Xcel, PG&E, etc. totaling $4.9B.
(July 2012)
In the Pacific Northwest, you either spill water or spill wind.
The wind power industry has been up in arms ever since the Bonneville Power Administration earlier this year announced its Interim Environmental Redispatch and Negative Pricing Policy. That policy, applicable during periods of high spring runoff and heavy water flow volumes on the Federal Columbia River Power System, calls for BPA to redispatch and curtail access to transmission for wind power generating turbines, and to replace that resource with hydroelectric power generated via BOA hydroelectric dams, in order to avoid having to divert water through dam spillways, which could threaten fish and wildlife by creating excess levels of Total Dissolved Gas (TDG), which can cause Gas Bubble Trauma. Yet the legal issue remains unclear: Does this practice imply discrimination in the provision of transmission service, or is it simply a matter of system balancing and generation dispatch? In fact, the FERC may lack jurisdiction over the dispute, as it pertains to the fulfillment of BPA’s statutory mandates.
Utility deals resume after 18 months of austerity.
Utilities are taking advantage of a sweet spot in the capital markets, pre-funding and refinancing at record low rates. But cheap money won’t resolve overhanging uncertainties preventing cap-ex projects and M&A deals. Greater certainty in America’s economic and policy outlook will clear a path for strategic change.
Despite a favorable outlook for utility finance, cost pressures are straining rate structures.
Utilities are bringing monumental capital-expenditure plans before rate regulators just as they’re dealing with a barrage of rising costs—for fuel and other commodities, as well as labor, pension-fund obligations, and interest payments. Ten energy-finance luminaries elaborate on the industry’s fortunes.