Who’s Building Natgas-Fired Electric Plants in the Marcellus?

You might think the companies most bullish on using Marcellus Shale gas to generate electricity would be utility companies–what is called, in the business, an LDC or local distribution company. LDCs love low-cost Marcellus gas to redistribute to their customers and are doing so. Case in point: UGI Central Penn now sources 80% of the natural gas it delivers to customers in northeast and central Pennsylvania from the Marcellus Shale on its doorstep (see UGI Central Penn Natgas Rates Go Down Thanks to the Marcellus). However, it’s not utilities, local–like UGI–or national–like NRG–that are building new electric generating plants that use natural gas. It is, instead, private equity firms–investors–like Panda Power Funds, building two new plants in NEPA (see Plugging in to Panda Power’s Electric Generation Supply Chain). Why is it that private equity funds are building these plants–not only in the Marcellus but also in other regions–and not utility companies? Bloomberg explains…

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