NRG Energy Inc. will acquire two coal-fired power plants in New England for $325 million from Wisconsin Energy Corp.
NRG is increasing its stake in merchant electric generation in New England. The merchant power company, with 15,000 Mw of generation, already owns 2,234 Mw in Connecticut. The current purchase will add base-load generation to its generation portfolio in that state.
New England has limited generation and its ISO operates close to the allowed limits of a tight reserve margin. Not much new generation has been constructed in the region yet as the recently deregulated market continues to be adjusted by regulatory authorities.
�In light of this acquisition, NRG is increasing its 2001 earnings per share estimate to roughly $1.30/ share,� says David Peterson, chairman and president of NRG in a statement.
Analyst consensus for next year�s earnings was $1.29/share, according to research firm FirstCall/Thomson Financial.
On the news, NRG share price increased 3.3%, or 87�/share, to $27.50 still down from a year high of $37.50.
The company is planning to apply for permits with the Connecticut Department of Environmental Protection to add pollution control technology to one of the newly acquired power plants.
Wisconsin Energy said it�s scaling back merchant energy to focus on electric generation and distribution and gas distribution in the Midwest and other non-energy related activities such as pump manufacturing and real estate businesses. The company owns an electric utility with 1 million customers in Wisconsin and Michigan�s Upper Peninsula.