U.S. FERC Approves TransAlta's Approximately $1 Billion Gas Power Plant Acquisition

en.Wedoany.com Reported - The U.S. Federal Energy Regulatory Commission (FERC) on Thursday approved gas-fired power plant transactions in New York and Colorado involving independent power producers PowerTransitions and TransAlta Holding.

In the larger transaction, independent power producer PowerTransitions was authorized to acquire the Roseton gas- and oil-fired power plant in Newburgh, New York, with a capacity of 1,242 megawatts, from a subsidiary of Castleton Commodities International. PowerTransitions is owned by Switzerland-based private equity firm Partners Group Holding.

In line with its business strategy, PowerTransitions plans to position the Roseton plant as part of a proposed "energy campus" to serve data centers and other high-energy-demand industries. When the company announced the deal last month, it stated that the plant's scale and existing grid infrastructure make it an ideal candidate for co-located development of a large energy campus, which would include new energy storage systems.

The Roseton plant began operations in 1974 and is located in Zone G of the New York Independent System Operator, which covers the Hudson Valley near New York City. Terms of the transaction were not disclosed. PowerTransitions plans to close the deal with Castleton by the end of the year, and the New York Public Service Commission approved the transaction on Thursday.

Last month, PowerTransitions also acquired five gas-fired power plants in New York with a combined capacity of 323 megawatts.

In another approved transaction, TransAlta Holding will acquire two gas-fired power plants with a combined capacity of 319 megawatts from subsidiaries of Kindle Energy for approximately $1 billion. Kindle Energy is 90% owned by investment firm Blackstone.

The two plants are located near Denver, with the Mountain Peak plant having a capacity of 163 megawatts and the Canyon Peak plant 157 megawatts. They have long-term tolling agreements with United Power and CORE Electric Cooperative, respectively.

TransAlta President and CEO Joel Hunter said in a June 3 press release that the acquisition adds new high-quality, low-risk assets in a core market and establishes a strategic foothold in Colorado, a state with accelerated growth potential. According to Hunter, these plants will generate approximately $33 million in annual cash flow, which can be redeployed into growth projects such as data centers in Centralia, Washington, and Alberta, Canada.

TransAlta owns a coal-fired power plant in Centralia. The Calgary, Canada-based independent power producer had originally planned to shut it down at the end of last year, but the U.S. Department of Energy ordered the company to continue operations. TransAlta plans to convert the plant to gas-fired generation under an agreement with Puget Sound Energy.

According to TransAlta, the Mountain Peak plant has been in operation since September, and Canyon Peak is expected to be operational by October. TransAlta expects the transaction to close by the end of this year.