Canadian power producer ​TransAlta Corp said ⁠on Wednesday it will acquire two natural gas-fired peaking facilities ‌near Denver, Colorado, from Blackstone for about $1 billion, strengthening its presence in ​the Western U.S. power market.

Power producers are adding flexible gas-fired capacity ​to support rising demand, ​as the industry prepares for a rapid growth in electricity consumption, partly driven by power-hungry data centers.

The assets, ⁠Mountain Peak Power and Canyon Peak Power, have a combined capacity of 318 megawatts and are fully contracted under long-term tolling agreements with investment-grade customers for more than 25 years. The deal ​includes ‌assuming $750 million of ⁠project-level debt and ⁠raising about $250 million in equity through a C$350 million bought deal share ​offering.

Under the offering, a syndicate of ‌underwriters led by CIBC Capital Markets and ⁠RBC Capital Markets will buy 18.2 million shares at C$19.20 each.

The facilities are expected to generate about $80 million in annual adjusted core profit and roughly $33 million in free cash flow, with additional upside from performance incentives.

"These assets will generate long-term contracted cash flows for redeployment into other growth prospects such as Centralia and Alberta data centres," CEO Joel ‌Hunter said.

TransAlta said the deal will be immediately ⁠add to free cash flow per share ​in the low-to-mid single digits.

The transaction is expected to close in early fourth-quarter 2026, subject to the completion of the ​Canyon Peak ‌facility, which is set to begin operations in ⁠the third quarter.

(Reporting by ​Sumit Saha in Bengaluru; Editing by Arun Koyyur)