Alberta-based AltaGas (TSX:ALA) said May 16 that it has completed the purchase of the 507-MW Blythe Energy Center in California, along with a 230-kV transmission line that stretches 67 miles, for $U.S.515m.
AltaGas is buying Blythe Energy, LLC along with its combined-cycle natural gas power plant and transmission line. LS Power was the ultimate parent of the power facilities.
FERC just approved the purchase May 13.
“Blythe is an important addition to our energy infrastructure portfolio and fits well with our strategy,” said AltaGas Chairman and CEO David Cornhill in a statement. “The addition of natural gas-fired power generation in the US provides us with another platform for growth to meet the increasing demand for clean sources of energy and capitalize on the renaissance of natural gas.”
The Blythe Energy Center is contracted under a power purchase agreement (PPA) with Edison International (NYSE:EIX) subsidiary Southern California Edison (SCE). The contract runs through July 2020.
When that PPA expires in 2020, Blythe is well positioned to contract with other market participants due to its location and ability to serve both the California Independent System Operator and Desert Southwest markets, AltaGas said.
In addition, Blythe is located on an owned 76-acre site which provides a significant geographic footprint for potential future expansion, the purchaser said.
The Acquisition is expected to be accretive to earnings and cash flow per share in 2014, the first full year of ownership, and is expected to add approximately $50m in incremental contracted EBITDA per year, AltaGas said.
AltaGas already has some renewable energy holdings in the United States. The combined-cycle plant went online in 2003.