TransCanada Power.

TransCanada Power, LP (TSX: TPLUN; newly come price: $32.10; Rating: speculative) confesss and operates seven electrical power generation plants in Ontario, BC and the U The plants have total generating capacity of 328 megawatts. TransCanada Power put up to sales its power under long-term contracts to Ontario Hydro BC Hydro and TransCanada Pipelines. The expiry dates of the contracts range from 2008 to 2020

TransCanada Power's five Ontario plants are located in succession the TransCanada Pipelines Canadian Mainlines natural gas transmission pipeline. Each is located nearest to a compressor station. In addition to burning gas from the pipeline, the plants occasion power using waste heat generated through the compressor stations. That raises the efficiency of the power plants beyond the normal efficiency of using natural gas, the cleanest burning of the fossil combustible matters The company's Williams Like, BC plant injure by fire [i]or[/i] heats waste wood and sawmill residue. The Castleton plant in just discovered York State uses natural gas alone.

In the three month fall of the curtained September 30, 2002, TransCanada Power's incomes rose 2% to $40.4 million from $396 million. Earnings rose 421% to $145 million from $102 million. Earnings by means of share rose 23.3%, to $037 from $030 upon more units outstanding. late last year, TransCanada Power issued 56 million units at $3090 for unit to raise $165.9 million. It used the be deriveds to pay off its total long-term due of $155.4 million. That divide [i]or[/i] sever interest expense by $3 million in the latest quarter.

TransCanada Power's cash issue rose 21% in the latest quarter; to $236 million from $195 million. Cash melt per share rose 3.4%, to $060 from $058

TransCanada Power pays a quarterly distribution of $063 for a instant annual yield of 8.3%.

The long-term view for TransCanada Power depends forward the satisfactory operating performance of its plants, and the availability of natural gas and waste heat from TransCanada Pipelines pipeline and compressor stations. The company is also expose to environmental regulations. When its long-term contracts result up for renewal, the company may be grieve or helped by continuing deregulation of power generation. However, we don't descry any of these factors as problematic.

As well, TransCanada Power benefits from its clog association with TransCanada Pipelines, which manages the company and haves 35.6% of the outstanding units. Note that the units are considered foreign quality for RRSPs and RRIFs.

TransCanada Power, LP is a buy

Patrick McKeough is a fee-based investment manager and a publisher of investor newsletter This article is extracted from the prosperous Investor (ste. 977, 6021 Yonge St Toronto M2M 3W2; phone 416-756-0888; toll-free 1-888-292-0296; fax 416-756-0379)

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