National Grid is to sell Ravenswood Generating Station in New York to TransCanada Corporation for $2.9 billion.

National Grid has announced that it is to sell Ravenswood Generating Station in New York to TransCanada Corporation for $2.9 billion (£1.46 billion).

The 2,280 megawatt generating station, fuelled mainly by natural gas, is situated in Queens and provides over 20% of New York City’s electricity supply. It was bought by National Grid in August 2007, when the international gas and electricity supplier acquired KeySpan.

The New York Public Service Commission allowed National Grid the acquisition of KeySpan under the condition that Ravenswood was divested.

Steve Holliday, National Grid’s Chief Executive, was delighted with the outcome of the acquisition process. He said: “Not only have we quickly delivered on our obligations to the New York Public Service Commission to sell Ravenswood but we have also delivered value for our shareholders. I am pleased that we have reached agreement with TransCanada, which has an excellent track record in operating power plants.”

TransCanada is involved in the development and operation of North America’s energy infrastructure and has approximately 3,550 employees. The close of the Ravenswood deal will add 200 more employees to its staff.

Hal Kvisle, President and CEO of TransCanada, commented on the acquisition: “This acquisition represents a significant expansion of our energy business into one of the most important power markets in North America. It fits strongly with TransCanada’s strategy to grow our power business in markets where our assets, expertise and financial strength enable us to be a strong competitor and reliable energy provider.”

The acquisition will be complete by summer 2008, subject to regulatory approvals.