Brookfield Renewable to offer limited partnership units in the U.S.

Brookfield Renewable Energy Partners LP (TSX: BEP.UN) on June 7 filed a registration statement on Form F-1 with the U.S. Securities and Exchange Commission for a proposed offering of its limited partnership units.

Brookfield Renewable expects those units to begin trading on the New York Stock Exchange on June 11 under the trading symbol BEP.

Brookfield Renewable operates one of the largest publicly-traded, pure-play renewable power platforms globally. Its portfolio is primarily hydroelectric and totals about 5,900 MW of installed capacity. Diversified across 70 river systems and 12 power markets in the U.S., Canada and Brazil, the portfolio’s output is sold predominantly under long-term contracts.

Over the last ten years, the company has acquired or developed about 160 hydroelectric assets totaling about 3,200 MW and 11 wind assets totaling about 950 MW. Since the beginning of 2013, it has acquired or developed hydroelectric assets that have an installed capacity of 389 MW and 165 MW of wind generating assets.

“We also have strong organic growth potential with a 1,800 MW development pipeline spread across all of our operating jurisdictions,” the June 7 filing said.

Under the category of recent developments are:

  • In January, BRP Equity, a wholly-owned finance subsidiary of Brookfield Renewable, issued 7,000,000 Series 5 Shares at C$25 per share for gross proceeds of C$175m. The proceeds were used to, among other things, repay outstanding indebtedness and for general corporate purposes.
  • On March 1, Brookfield Renewable acquired a portfolio of hydroelectric stations in Maine (called “White Pine”) from a subsidiary of NextEra Energy Resources LLC for a total enterprise value of approximately $760m, subject to typical closing adjustments. The portfolio consists of 19 hydroelectric facilities and eight upstream storage reservoir dams primarily on the Kennebec, Androscoggin and Saco rivers in Maine, with an aggregate capacity of 360 MW and expected average annual generation of approximately 1.6 million MWh.
  • On March 13, a wholly-owned subsidiary of Brookfield sold 8,065,000 LP units of Brookfield Renewable in Canada at an offering price of C$31 per LP unit under a bought-deal secondary offering with a syndicate of underwriters.
  • On March 20, the company acquired the remaining 50% interest held by a partner in Powell River Energy, which operates a hydro facility consisting of two generating stations located in British Columbia, for C$33m plus the assumption of related debt.
  • In May, BRP Equity issued 7,000,000 Series 6 shares at C$25 per share for gross proceeds of C$175m. The proceeds were used to repay outstanding indebtedness and for general corporate purposes.

Power customers include the Ontario Power Authority, Entergy Louisiana

In North America, the company generates revenues primarily through energy sales by way of long-term power purchase agreements (PPAs) with creditworthy counterparties such as government-owned entities or power authorities (including the Ontario Power Authority, Ontario Electricity Financial Corp., Hydro-Québec, BC Hydro and the Long Island Power Authority), load-serving utilities (such as Entergy Louisiana), Brookfield and its subsidiaries, and in some cases industrial power users.

Currently, Brookfield’s North American portfolio is largely contracted under long-term PPAs that are generally structured on a “take or pay” basis without fixed or minimum volume commitments. As a result, there is minimal risk of having to supply power from the market to customers when the power projects experiencing low water or wind conditions. Most of the PPAs also provide for annual escalation of the realized price, typically linked to inflation.

In the U.S., the company is strategically focused on the power markets in the northeast (in the mid-Atlantic) and California, with operations in other states such as Minnesota, Tennessee, North Carolina and Louisiana. The majority of its U.S. capacity is in New York and New England.

In New York State, Brookfield is one of the largest independent power producers with 75 hydroelectric facilities with an aggregate installed capacity of 711 MW. It has 1,204 MW of operating hydroelectric capacity in New England, including a 50% joint-venture operating interest in a 600 MW hydroelectric pumped storage facility located in Massachusetts.

Brookfield also owns eight wind farms located primarily in New Hampshire and California with a combined installed capacity of 538 MW. The California wind farms are located in the Tehachapi area, one of the most proven wind resource areas in the U.S., attractively located near Los Angeles, the F-1 filing noted. The company also owns one combined cycle, natural gas-fired facility in New York State, which sells its power output on a merchant basis and is predominantly used to meet power needs at times of peak demand.

Brookfield’s U.S. headquarters are located just outside of Boston, Mass., along with its U.S. National System Control Center, which can remotely control and monitor nearly all of its facilities in the country.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.