2 Utility Trusts for Income & Growth

Article Excerpt

TRANSALTA POWER, L.P. $8.08 (Toronto symbol TPW.UN; SI Rating: Extra risk) owns a 49.99% interest in TransAlta Cogeneration, L.P., which in turn holds interests in five gas-fired cogeneration plants in Ontario, Saskatchewan and Alberta, and in the Sheerness coal-fired plant in Alberta. TransAlta Power has secured long-term contracts for all of its power. Cogeneration is the simultaneous production of power and useful heat from a single fuel source. TransAlta Corp., one of our long-time safety-conscious stocks, owns the remaining 50.01% interest in TransAlta Cogeneration and is responsible for the operation and maintenance of the plants. TransAlta Power’s shares dropped recently after it released its results for the three months ended June 30, 2006. The company made $267,000 or nil per share, down from $3 million or $0.04 a share a year earlier. The lower results in the latest quarter came from higher fuel expense, planned maintenance expenses and an accelerated non-cash depreciation schedule at two of its plants. TransAlta Power expects cash distributions to…

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