Integrated energy company Entergy Corporation (ETR) announced that its unit Entergy Mississippi Inc. will purchase Hinds Energy Facility, a 450 megawatt (MW) natural gas turbine, from KGen Power Corporation for $206 million.
The company considers this to be a cost effective way to increase generation without building a new plant.
Once the deal is finalized, Entergy Mississippi plans to invest in upgrading the acquired plants, taking the total cost of acquisition to $246 million. If approved by the regulatory authorities Entergy expects the deal to close in mid 2012.
Also, Entergy Arkansas, a unit of Entergy, has signed an agreement to acquire a 620 MW natural gas-fired Hot Spring Energy Facility from a subsidiary of KGen Power Corporation for $253 million. With additional expenditure for upgrades the total cost for this acquisition will reach $277 million.
Another Entergy unit, Entergy Louisiana LLC, completed the acquisition of Acadia Energy Center Power Block 2 and 50% of the facility's common assets from Acadia Power Partners LLC, an independent power producer, for $300 million. The assets include a 580-MW combined-cycle gas-turbine generation plant.
It appears that Entergy has taken the acquisition route to expand its generation capacity and cater to the long-term energy needs of its consumers. The current acquisition deals, when completed, would boost Entergy's present 30,000 MW generation capacity by a further 5.5%.
Apart from making strategic acquisitions, the Entergy Louisiana unit has also sought permission from the commission to build a new 550 MW natural gas unit at its existing Ninemile Point plant in Westwego, Louisiana. All these environment-friendly green power projects aid Entergy to spur generation and produce clean and reliable power.
Entergy Corporation currently retains a Zacks #3 Rank (short-term Hold rating). The company competes with American Electric Power Co. Inc. (AEP), CenterPoint Energy Inc. (CNP) and Southern Company (SO).
New Orleans, Louisiana based Entergy Corporation along with its subsidiaries engages in electric power production and retail electric distribution operations.
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