Mankato Power Center Proceeds with Expansion amid Ownership Change

Researched by Industrial Info Resources (Sugar Land, Texas)--A 345-megawatt (MW) expansion of the Mankato Energy Center in Minnesota is under development, but it will be in the hands of a new owner. Southern Company (NYSE:SO) (Atlanta, Georgia) subsidiary Southern Power will buy the power center for $395.5 million from Calpine Corporation (NYSE:CPN) (Houston, Texas), the companies announced Thursday.

Both companies noted the Mankata Energy Center II expansion, which had received capital approval as of June this year. When complete, the natural gas-fired, combined-cycle power facility will have 720 MW of generation capacity. The expansion project has a total investment value of $194 million, with kickoff set for second-quarter 2017 and completion in second-quarter 2019. The project includes construction of a 242-MW Siemens natural gas-fired combustion turbine generator with a heat recovery steam generator to convert the existing one-on-one combined-cycle configuration to a two-on-one configuration to provide additional power.

Mankato Energy Center I is contracted with Northern States Power, a subsidiary of Xcel Energy Incorporated (NYSE:XEL) (Minneapolis, Minnesota), through 2026. The expansion is expected to serve an additional 20-year power purchase agreement with Northern States Power, according to Southern Power.

Calpine said the sale is part of its plan to divest plants in non-core regions. It will use the sales proceeds to reduce corporate debt and for other purposes.

Southern Power will now own 10 combined-cycle and combustion-turbine, natural gas-fueled power plants across five states, representing 9,300 MW of generating capacity operating or under development, the company said.

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