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Wave of Power Plant Sales to Continue
The 35,000 MW of power generation that already has beenidentified to be sold in the next 18 months is not just a one-timefluke in the power market. It’s the beginning of a process thatwill continue for years to come, according to Siemans Corp.’s DavidL. Hartman, director of corporate development.
“This is not a blip. We think there’s going to be between 20,000and 30,000 MW of power plants changing hands indefinitely. I wouldsay somewhere between 3% and 4% of the US. capacity is going to bechanging hands every year for the next 20 years,” Hartman told GasMart/Power ’98 last week in New Orleans. “Obviously some of thebest assets are going to go first but you’re going to seecontinuous churn there. There have been $5 billion in merger andacquisition transactions in the IPP industry in the last threeyears and this is going to continue.”
Hartman predicted that once deregulation settles down a bit in afew years there will be another boom again in utility mergers andgeneration assets sales. “There’s a lot of stuff for sale right nowbut the prices are steep. Nobody can say the prices are economicright now. I think it’s going to take a little more time for thoseprices to reach a reasonable equilibrium on the asset side. The IPPand power market will consolidate further.”
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