Ownership of Central Valley power plants changes hands

CALGARY, ALBERTA

September 21, 2015 9:06pm

•  AltaGas pays $642 Million

•  “Gives us more opportunities for growth and for creating shareholder value”

Three Central Valley gas-fired power plants are coming under Canadian ownership. AltaGas Ltd. (TSX: ALA) of Calgary, Alberta, says it and its indirect wholly owned subsidiary AltaGas Power Holdings (U.S.) Inc. have entered into a purchase and sale agreement with Highstar Capital IV, L.P., and certain of its affiliates to acquire GWF Energy Holdings LLC, which holds a portfolio of three natural gas-fired electrical generation facilities in the Central Valley totalling 523 MW. These are a 330 MW plant in Tracy, a 97 MW plant in Hanford and a 96 MW plant about 20 miles from Hanford, called Henrietta. The purchase price of $642 million is subject to certain closing adjustments. "Having a diversified energy infrastructure business across North America gives us more opportunities for growth and for creating shareholder value," says David Cornhill, chairman and CEO of AltaGas. "The acquisition of these power facilities is an important addition to our business. Each asset has a power purchase agreement that will further enhance AltaGas' stable earnings and cash flow."

The facilities are fully contracted under power purchase agreements through to the fourth quarter of 2022 with Pacific Gas & Electric Company. Tracy's existing interconnection with PG&E for natural gas supply allows for avoidance of incremental transportation charges resulting in a cost advantage for the facility. Hanford and Henrietta are connected to the Southern California Gas system for natural gas supply. All are connected to the PG&E transmission system