TransCanada Profit Rises on Higher Electricity Prices

TransCanada Corp. (TRP), the Calgary-based company seeking to build the Keystone XL oil-sands pipeline, said third-quarter profit rose 30 percent as it took advantage of higher electricity prices.

Net income increased to C$481 million ($461 million), or 68 cents a share, from C$369 million, or 52 cents, a year earlier, the company said in a statement on Marketwired today. Excluding one-time items, per-share profit exceeded the 59-cent average of 11 analysts’ estimates compiled by Bloomberg.

The company got 34 percent of its revenue last year from power generation, and the rest from transporting oil and natural gas on its more than 60,000-kilometer (37,000-mile) pipeline network. TransCanada is supplying more electricity from the Bruce Power nuclear plant in Ontario as all eight units at the site returned to service this year for the first time in two decades.

“There were some pretty strong power prices in the Alberta market and pretty healthy capacity auction prices for the U.S. power business,” Patrick Kenny, an analyst at National Bank Financial in Calgary, said in an Oct. 30 phone interview.

The capacity price for New York City was $14.80 a kilowatt-month in the summer this year, up from $11.70 a kilowatt-month in 2012, according to the New York Independent System Operator. TransCanada’s Ravenswood power plant in New York, its largest power facility in the U.S., is able to provide 21 percent of the city’s power, according to the company’s website.

Review ‘Hijacked’

TransCanada expects a U.S. ruling on its proposed Keystone XL pipeline connecting Canada’s oil sands to U.S. Gulf Coast refineries in the first three months of 2014, Alex Pourbaix, president of energy and oil pipelines, said Oct. 16. The pipeline is expected to be in service two years after the company has its presidential permit, it said today.

Russ Girling, chief executive officer of TransCanada, has been critical of the U.S. government’s Keystone XL review, saying on Oct. 30 the process has been “hijacked by activists.”

The $2.3 billion lower leg of Keystone XL from Cushing, Oklahoma, to the Gulf Coast will start transporting crude “near the end of 2013,” the company said today. That segment, which is now 95 percent complete, didn’t require a presidential permit.

TransCanada, which has 11 buy and six hold recommendations from analysts, released results before the start of regular trading on North American markets. The shares rose 0.2 percent to C$46.98 in Toronto.

To contact the reporter on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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