Wind Dominates Power-Plant Capacity Deals

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Power-plant mergers and acquisitions in the second quarter of this year continued a streak of heightened activity, according to SNL Financial.

Plants involved in second-quarter deals combined for an aggregate capacity of 27,629 MW, fueled by multiple large utility deals. The capacity of plants announced in deals for the period was on par with the quarterly average for 2010 but down significantly from the 45,753 MW dealt in first-quarter 2011 deals.

The first quarter was dominated by the announcement of Duke Energy Corp.'s planned merger with Progress Energy Inc., which involved about 50 power plants, potentially creating the nation's largest utility with more than 55,000 MW of capacity.

Wind made up the bulk of plant capacity announced in renewables deals in the second quarter, with plants combining for 1,838 MW. Notable among those deals was the acquisition of a 56% ownership interest from GE in the proposed Shepherds Flat wind farm in Gilliam County, Ore., by an investor group comprising Google Inc., Sumitomo Corp. of America – a unit of Tokyo-based Sumitomo Corp. – and Tyr Energy Inc., a unit of Tokyo-based ITOCHU Corp.

The project, which is expected to be completed in 2012, consists of the 290 MW Shepherds Flat Central and Shepherds Flat segments, as well as the 265 MW Shepherds Flat North project. The investor group will invest about $500 million in the $2 billion project.

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