Atlantic Power selling stake in California’s Path 15

Boston-based Atlantic Power Corporation (NYSE:AT) is conducting a sale process for its 100% interest in the 84-mile, 500-kV transmission line in California known as Path 15.  Located south of Los Banos, Calif., on the west side of the state’s Central Valley, it is part of the major north-south power line in the state.

The action, announced Nov. 5 as part of its 3Q12 earnings report, is part of the company’s continued effort “to rationalize its non-core assets.”

The company acquired its interest in the line in September 2006 when it indirectly acquired 100% of Trans-Elect NTD Path 15, for approximately $85.5m. Trans-Elect, which was renamed Atlantic Path 15, owned approximately 73% of the transmission service rights (TSRs) in the Path 15 project, which Atlantic assigned to the California ISO in exchange for a regulated rate of return.

As such, the company “received a stable revenue stream, based on tariff rates regulated and approved by the Federal Energy Regulatory Commission,” according to the company’s web site.

Path 15 is the company’s only transmission project and, despite the stability of the revenue, makes a relatively small contribution to overall cash flow, the company said.

Details about a potential buyer and purchase price were not immediately available. Calls seeking additional details from Atlantic Power were not returned by press time Nov. 7.

In addition to Path 15, the company is divesting itself of other non-core assets including an approximately 17% interest in the 411-MW combined-cycle Gregory Power plant in San Patricio County, Texas, and its 40% interest in the 140-MW gas-fired Delta Person facility in Bernalillo County, N.M. Those interests are being sold together with the interests of the other partners in those projects.

The company also completed the sale of its 50% interest in the 15 MW Badger Creek cogeneration plant in Bakersfield, Calif., on Sept. 4, 2012, for proceeds of approximately $3.7m.

The Western Area Power Administration (WAPA) owns the rights to approximately 10% of the line, while Pacific Gas & Electric (PG&E) owns approximately 17%, a WAPA spokesperson told TransmissionHub Nov. 7.  WAPA is responsible for the operation and maintenance of the line.

PG&E is a subsidiary of PG&E (NYSE:PCG).