Following the merchant generation industry can be confusing. Consider Orion Power Holdings, which went through four ownership changes in 12 years.

Orion was an upstart merchant generator formed in 1998. By 2001, it had 81 plants and drew the eye of Reliant Resources, a unit of Reliant Energy of Houston, which purchased it for $2.9 billion.

Reliant added merchant generator Mirant in 2010 to form GenOn Energy, Inc. GenOn, in turn, was acquired by NRG energy, a merchant generator which had clawed its way out of bankruptcy protection in 2003.

Musical Chairs in Boston

Another illustration of how dynamic the merchant generation business can be is the convoluted history of some plants in the Boston area.

In 1997, Boston Edison, deciding it didn’t want to be a merchant generator, sold six power plants to a startup merchant generation company called Sithe Energies. Sithe lined up financing to build large gas-fired combined cycle generators at two of the sites.

While Sithe’s plants were still under construction, the company was swallowed up by Exelon in 2002.

But in 2003, with construction deadlines long past without the plants coming on line, and natural gas price spikes making the projects less attractive, Exelon decided to call it quits.

“When investments do not work out as planned, we will not make it worse by throwing good money after bad,” said Exelon chairman and CEO John Rowe.

Upon Exelon’s exit, the plants came under the ownership of EBG Holdings in 2004.

EBG Holdings merged with Astoria Generating Co. to become U.S. Power Generating Co. in 2007. The Boston-area plants operated under the name of Boston Generating.

Bankruptcy

After Boston Generating fell into financial trouble in 2010, Constellation Energy Group bought the Boston-area plants for $1.1 billion at a bankruptcy auction.

By this time, natural gas prices had plummeted, power prices had surged, and the Boston plants were looking good. “We’re very pleased to have been named the winner in the auction for these well-managed natural gas assets, which will significantly expand our generation presence in a key competitive market,” Constellation said at the time.

Meanwhile, Exelon was casting about for ever-larger numbers of regulated retail customers in order to expand. A proposed takeover of PSEG collapsed in 2006 in the face of regulatory resistance in New Jersey.  A year later, Exelon abandoned a hostile takeover of NRG Energy.

But in 2012, Exelon successfully completed the purchase of Constellation.

And once again, the Boston plants found themselves in the Exelon stable.

— Ted Caddell