TransCanada Completes Acquisition of New England Hydro Assets
CALGARY, Alberta – April 1, 2005 – (TSX: TRP) (NYSE: TRP) –TransCanada Corporation today announced it has closed its acquisition of hydroelectric generation assets from USGen New England, Inc. for $505 million US in cash, subject to specified closing adjustments. The assets have a total generating capacity of 567 megawatts (MW). The sale, previously announced in September 2004, received bankruptcy court approval and met other regulatory approvals and conditions.
“We’re pleased to be growing our power business through this acquisition,” said Hal Kvisle, TransCanada’s chief executive officer. “With the addition of these strong hydro facilities and expert employees, TransCanada now offers more power, reliability and flexibility to meet the needs of our customers in the U.S. Northeast.”
An existing agreement between the Town of Rockingham and USGen New England provided the Town with the option to purchase the 49 MW Bellows Falls facility for $72 million US. In December, 2004 the Town exercised the option and assigned its rights to the Vermont Hydroelectric Power Authority. TransCanada has assumed USGen’s rights and obligations under the option agreement and will therefore sell the Bellows Falls hydroelectric facility to Vermont Hydroelectric Power Authority for $72 million US. Before it can close, the transaction requires regulatory approvals and the satisfaction of certain conditions under the option agreement.
When the sale of the Bellows Falls facility is completed, TransCanada will have 12 dams with 36 hydroelectric generating units on two rivers in New England: the Connecticut River in New Hampshire and Vermont and the Deerfield River in Massachusetts and Vermont. Operations of these facilities, known as the Deerfield River and Connecticut River Systems, will be integrated into TransCanada’s existing operations model.
TransCanada is financing the acquisition in a manner consistent with maintaining its solid financial position and credit ratings. TransCanada expects the transaction to be immediately accretive to earnings and cash flow.
TransCanada is a leading North American energy company. TransCanada is focused on natural gas transmission and power services with employees who are expert in these businesses. TransCanada’s network of approximately 41,000 kilometres (25,600 miles) of pipeline transports the majority of Western Canada’s natural gas production to the fastest growing markets in Canada and the United States. With the acquisition of the USGen hydro assets, TransCanada now owns, controls or is constructing approximately 5,700 megawatts of power generation – an amount of power that can meet the needs of about 5.7 million average households. The Company’s common shares trade under the symbol TRP on the Toronto and New York stock exchanges.
Certain information in this news release is forward-looking and is subject to important risks and uncertainties. The results or events predicted in this information may differ from actual results or events. Factors which could cause actual results or events to differ materially from current expectations include, among other things, the ability of TransCanada to successfully implement its strategic initiatives and whether such strategic initiatives will yield the expected benefits, the availability and price of energy commodities, regulatory decisions, competitive factors in the pipeline and power industry sectors, and the current economic conditions in North America. For additional information on these and other factors, see the reports filed by TransCanada with Canadian securities regulators and with the United States Securities and Exchange Commission. TransCanada disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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