Calpine working on deal to sell Osprey plant to Duke Energy

Calpine (NYSE: CPN) and Duke Energy (NYSE: DUK) have apparently reached agreement for a Duke utility subsidiary to purchase the 600-MW Osprey combined-cycle natural gas power plant from Calpine.

“I can confirm that we have in fact reached a deal in principle for the sale of our Osprey plant to Duke Energy Florida,” a Calpine spokesperson told GenerationHub on Sept. 4. “We continue to work on finalizing the contract documents but are hopeful we will have this accomplished within the next 60 days.”

The Calpine spokesperson was asked to comment on an Aug. 28 commentary by UBS Global Research Electric Utilities Analyst Julien Dumoulin-Smith that Duke was “poised to buy” Osprey although “a deal has yet to be formally inked.”

“We don’t have a final, sealed agreement yet,” a Duke Energy Florida spokesperson said Sept. 4 when contacted by phone. “We certainly are looking to finalize a deal very soon,” the Duke spokesperson said, adding that such a transaction would need the usual government approvals.

Duke and Calpine have been locked in administrative hearings before the Florida Public Service Commission (PSC) over plans by the regulated Duke Energy Florida to develop its own new natural gas-fueled capacity.

Calpine has argued that its Osprey combined-cycle power plant located in Auburndale, Fla., would be a more economical option for affected Florida ratepayers. Osprey was commissioned in May 2004 and was the first combined-cycle gas plant built and owned by an independent power producer (IPP), according to the Calpine website.

If a transaction indeed becomes reality it would likely be a “win-win” for both Duke and Calpine, said the UBS analyst. UBS sees a potential deal as part of a larger trend of IPP units in largely regulated markets being sold to regulated electric utilities.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.