TransCanada to buy National Grid plant
NEW YORK, NEW YORK - TransCanada has agreed to buy a large New York power plant from utility National Grid for around $2.9 billion.
National Grid is divesting the 2,480 megawatt gas-fired Ravenswood plant to satisfy regulators after its takeover of New York utility KeySpan.
"National Grid have received a price of $1,160 per kilowatt, which is a good price - slight premium to re-investment cost," said analysts at UBS.
Ravenswood is valuable as it supplies over 20 percent of the electricity for New York City, where it is difficult to find land on which to build new capacity and demand for power is always high.
The deal, which is expected to complete this summer, will reduce TransCanada earnings for the first two years but boost profit thereafter.
The sale will generate a gain for National Grid, which said KeySpan had recorded a carrying value of $1.2 billion for the plant.
Analysts at Credit Suisse estimated National Grid would gain $2 billion in proceeds after capital gains tax and accounting for fuel stocks and lease prepayment, which would give 7 pence a share of upside to their 880 pence target price.
"We estimate the sale converts into a gross $1,170 per kilowatt valuation, slightly above our estimated newbuild cost of circa $900-$1100 per kilowatt for U.S. Combined Cycle Gas Turbines and for other recent transactions in the U.S.," they added.
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Power bill cut for 22m Thailand houses
BANGKOK - The Thailand cabinet has formally approved energy authorities' decision to either waive or cut electricity charges for 22 million households where people are working at home because of the coronavirus disease.
Energy Minister Sontirat Sontijirawong said after the cabinet meeting on Tuesday that the ministers acknowledged the step taken by from the Energy Regulatory Commission, the Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority and the Provincial Electricity Authority.
The measure would be valid for three months, from March to May, and cover 22 million households. It would cost the state 23.68 billion baht in lost revenue, he said.
