Oil moves higher on bullish inventories, Algeria attacks

Terror in Algeria

The 2012 data include capacity from three large electric company mergers: Duke Energy and Progress Energy, which closed on July 2, 2012; the Exelon Corporation and the Constellation Energy Group, which closed on March 12, 2012; and the acquisition of GenOn Energy by NRG Energy, which closed on December 14, 2012.

An electric power company chooses to buy or sell a generator for a number of reasons including diversifying fuel mix, complying with regulations, taking advantage of distressed assets in the marketplace, or to free operating capital. Natural gas and renewable units comprise a majority of the generating capacity bought or sold since 2005.

Source: U.S. Energy Information Administration based on SNL Energy.  Note: Annual totals reflect operating capacity of generators for which the purchase and sale was completed within the calendar year.

Power plant acquisitions include the purchase of an entire plant site, a single generator, a share of a generator, or even an entire company. A single generator can be owned by multiple entities. For example, the Palo Verde Nuclear Generating Station is fractionally owned by: American Public Service Company (29.1%), Salt River Project (17.5%), El Paso Electric Co. (15.8%), Southern California Edison (15.8%), Public Service Co. of New Mexico (10.2%), Southern California Public Power Authority (5.9%), and Los Angeles Department of Water & Power (5.7%).

Companies that purchase electric generating capacity include regulated electric utilities, independent power producers, industrial power users, municipal power companies, investment banks and private equity investors. Transactions involving regulated electric utilities are often subject to approval from state public utility commissions. The purchase or sale of an investor-owned asset may or may not be subject to approval from state commissions or federal entities like the Federal Energy Regulatory Commission, Security and Exchange Commission or the Federal Trade Commission.

About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.

 

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.


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