Capital Power expands in PJM market with $2.2 Billion deal

Capital Power Corp, a Canadian power producer, announced on Monday that it will buy two natural gas-fired power plant operators in the PJM Market for approximately $2.2 billion.

The agreement comes as electricity prices in PJM (the largest power market in the United States) are increasing rapidly, and demand for electricity is continuing to rise due to the proliferation of energy-hungry AI data centers, and the electrification and modernization of buildings and transportation.

Capital Power announced that it had agreed to buy the power plant operators Hummel Station Intermediate Holdings III, and Rolling Hills Generating Holdings (formerly LS Power Equity Advisors) from LS Power Equity Advisors.

Hummel Station is the owner of a combined-cycle natural gasoline facility with a capacity of 1,124 megawatts (MW) in Shamokin, Pennsylvania. Rolling Hills, on the other hand, owns a combustion turbine natural gases facility with 900 MW in Wilkesville.

Capital Power stated that the acquisition would immediately increase adjusted funds from operation per share. The company added that, upon completion, it will be one of five independent North American power producers with more than 10 gigawatts natural gas capacity.

Capital Power anticipates that the acquisition will generate an average adjusted EBITDA annual of approximately $443 million during the period 2026-2030. The transaction is expected to be completed in the third quarter.

The power producer said it had begun an offering of $500,000,000 of its common stocks, which will help fund the acquisition. (Reporting and editing by Maju Sam in Bengaluru, Vallari Srivastava from Bengaluru)

(source: Reuters)