Key insights
- Canadian power producer TransAlta is acquiring two natural gas-fired power plants in Colorado from Blackstone for $1 billion. This move strengthens TransAlta's U.S. presence and aligns with growing electricity demand, partly from data centers. The deal, expected to close in Q4 2026, is structured with debt and equity financing and is anticipated to be immediately accretive to free cash flow. While a significant company-specific event, its direct, immediate impact on the broader U.S. equity market is limited.
June 3 (Reuters) - Canadian power producer TransAlta Corp said on Wednesday it will acquire two natural gas-fired peaking facilities near Denver, Colorado, from Blackstone for about $1 billion, strengthening its presence in the Western U.S. power market.
Power producers are adding flexible gas-fired capacity to support rising demand, as the industry prepares for a rapid growth in electricity consumption, partly driven by power-hungry data centers.
The assets, Mountain Peak Power and Canyon Peak Power, have a combined capacity of 318 megawatts and are fully contracted under long-term tolling agreements with investment-grade customers for more than 25 years.
The deal includes taking on $750 million of project level debt and raising about $250 million in equity through a share sale.
The facilities are expected to generate about $80 million in annual adjusted core profit and roughly $33 million in free cash flow, with additional upside from performance incentives.
"These assets will generate long-term contracted cash flows for redeployment into other growth prospects such as Centralia and Alberta data centres," CEO Joel Hunter said.
TransAlta said the deal will be immediately add to free cash flow per share in the low-to-mid single digits.
The transaction is expected to close in early fourth-quarter 2026, subject to the completion of the Canyon Peak facility, which is set to begin operations in the third quarter.
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