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Dominion plants said to be for sale have forecast revenue of $3.9B through 2028

Dominion Energy Inc. is said to be looking for buyers for two gas-fired power plants it owns in the Northeast, according to reports earlier in July. The Fairless Works Energy Center and Manchester Street plants could bring in $3.9 billion in energy and capacity revenue from 2019 through 2028, according to an analysis using S&P Global Market Intelligence's Power Forecast.

The 1,320-MW Fairless Works Energy Center came online in 2004 in Bucks County, Pa. The plant, which dispatches into the PJM Interconnection market, generated 7,570,296 MWh in 2017. According to an analysis using S&P Global Market Intelligence's unit level production cost model, the Generation Supply Curve, power prices at the PJM Western Hub fell below the plant's operation and maintenance, or O&M, expenses just one time from January 2016 through June 2018. Costs to run the plant have been on the rise, though, increasing from $16.13/MWh in 2016 to $29.04/MWh in 2018.

The 510-MW Manchester Street plant, located in Providence R.I., began operating in 1995 and dispatches power into the ISO New England market. In 2017, the facility generated 1,845,085 MWh at an O&M expense of $37.61/MWh. The plant's O&M expenses ran above power prices at ISO-NE's .H.INTERNAL Hub for most months from January 2016 through June 2018. Over the same period, the plant's annual O&M expenses rose nearly 43%, from $31.33/MWh to $44.66/MWh.

Despite increases in operating costs, data from S&P Global Market Intelligence's Power Forecast shows a positive outlook for both plants. Using data forecast as of March 31, Fairless Works is projected to have an annual operating margin between $83 million and $107 million over the next decade. That margin may increase, as Eastern MAAC's unexpectedly high clearing price of $165.73/MW-day in PJM's 2021/22 base residual action could further boost the plant's capacity revenue. Projections for Manchester Street show the plant maintaining a positive operating margin through 2028, fluctuating between $21 million and $48 million annually.

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