CALGARY—TransCanada Corp. has entered into an agreement to buy a major eastern Pennsylvania asset. The company has announced it will acquire the Ironwood natural gas fired, combined cycle power plant in Lebanon, Penn. from Talen Energy Corp. for US$654 million.
With a capacity of 778 megawatts, the plant is located close to the Marcellus shale gas region, giving it access to competitively priced natural gas. It is also in an area of the U.S. in the process of transitioning away from coal-fired power generation.
“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,” Russ Girling, TransCanada’s president and CEO, said. “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 company expects the acquisition to begin generating earnings and cash flow immediately, pulling in $90-$110 million annually. The deal will be financed through a combination of cash and available debt capacity; it is subject to customary conditions and expected to close in the coming months.