Two High-quality Power Trust Buys

Article Excerpt

TRANSALTA POWER, L.P. $8.70 (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 December 31, 2005. The company lost $26.5 million or $0.36 a share, compared to a profit of $12.9 million or $0.18 a unit a year earlier. The loss in the latest quarter came from a one-time asset impairment charge taken against its Ottawa cogeneration facility. The plant’s natural gas contract expires next year,…

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