HOUSTON — Calpine Corp. has agreed to sell a Florida power plant to Duke Energy, but the companies have not yet finalized the terms of the deal, a Calpine spokesman said.
The transaction stems from a debate playing out in Florida about whether Duke Energy should buy an existing plant or build new units to meet what it says is the need for more power supplies.
At a hearing of the Florida Public Service Commission earlier this week, the companies announced that Duke had agreed in principal to buy Houston-based Calpine’s Osprey Energy Center, a natural gas-fired facility located about 45 miles east of Tampa. It opened in 2004.
The companies took the unusual step of announcing the deal before all the details were hammered out. That’s because Duke withdrew its request to the state for permission to build its own new peaker unit and had to explain why, said Brett Kerr, a Calpine spokesman.
Kerr said it could take at least another month to finalize the terms of the transaction.
The move would continue Calpine’s divestment of its southeast portfolio. In July, Calpine closed a deal in which it sold six power plants located in the southeastern part of the country for $1.6 billion. Then, earlier this week, it announced the purchase of its first power plant in Massachusetts in a $530 million deal.
Swapping assets in the Southeast for ones in the Northeast makes sense for Calpine since the Northeast power markets are less regulated, said Andrew Bischof, an analyst at Morningstar.
Analysts at the financial services firm UBS predicted the price tag for the Osprey plant could be around $120 million to $180 million.
The Tampa Bay Times has previously reported that the Florida ratepayers could save $1 billion if Duke bought the Osprey plant and two other facilities as opposed to building new facilities it had proposed.
Critics of Duke had accused the company of looking to build expensive and unnecessary facilities before it made an about-face and opted to buy the Osprey facility, which it had previously said was not well-suited for purchase.