By William Opalka

Entergy has agreed to sell a Rhode Island natural gas-fired power plant to The Carlyle Group for $490 million, a 40% mark-up in less than four years.

Entergy acquired the 13-year-old Rhode Island State Energy Center in Johnston, R.I., from NextEra Energy Resources for $346 million in December 2011. Entergy increased the plant’s capacity from 550 MW to the current 583 MW.

“Our strategy for Entergy Wholesale Commodities is focused on being disciplined about reducing risk and freeing up financial resources for other opportunities,” Entergy CEO Leo Denault said in a statement. “RISEC has been a very good investment for us, and its sale is consistent with that strategy.”

Entergy expects to record a net gain of approximately 50 cents/share assuming closing of the sale occurs in the fourth quarter, it said.

Carlyle insists it is a good deal for it as well.

“RISEC is among the most efficient combined-cycle facilities in New England and is well-positioned to capitalize on strong regional market dynamics. New England represents an attractive market for investment due to its transparency and incentives for reliable generation,” Matt O’Connor, Carlyle managing director and co-head of Carlyle Power Partners, said in a statement. “Additionally, the retirement of aging generation in the region is putting a greater emphasis on efficient gas-fired generators, like RISEC, to meet everyday electricity demand.”

The purchase is being made through Carlyle’s portfolio company Cogentrix Energy Power Management. It increases its power generation portfolio to 18 power plants totaling more than 4,900 MW.

The plant is located in ISO-NE’s constrained Southeastern Massachusetts-Rhode Island capacity zone. The zone failed to meet its capacity requirement in February’s ninth Forward Capacity Auction, which led to the imposition of administrative pricing well above those of resources that cleared at auction. (See Prices up One-Third in ISO-NE Capacity Auction.)

The announcement comes just a few weeks after UBS Global Research downgraded Entergy to sell, based on the prospects for its wholesale commodities unit.

“After the latest disclosures of potential early retirements of Fitzpatrick [838 MW, in New York] and Pilgrim [688 MW, in Massachusetts], we are increasingly concerned about the unregulated plant value,” UBS wrote.

Entergy last month said it may close Pilgrim rather than begin expensive repairs required by the Nuclear Regulatory Commission. (See “NRC Downgrades Arkansas One, Pilgrim Nuclear Plants” in Federal Briefs.)

NRC twice in recent weeks announced deficiencies in the plant’s safety operations. (See “NRC Finds Pilgrim Station’s Weather Tower Inoperable” in Federal Briefs.)