Carlyle buys gas plants in California, New Jersey

The Carlyle Group (NASDAQ:CG) and its power affiliate Cogentrix said Sept. 9 that they have increased their stable of natural gas power plants thanks to transactions in California and New Jersey.

Carlyle said in a news release that it has agreed to acquire the Red Oak power generation facility in Sayreville, N.J., and has separately purchased five power plants in California.

Red Oak, which is being acquired from Energy Capital Partners, is an 823-MW natural gas-fired combined-cycle plant. Red Oak operates under a long-term power purchase agreement and is part of the PJM Interconnection power market.

Energy Capital acquired the Red Oak gas plant in New Jersey from an AES (NYSE:AES) subsidiary in spring 2012, according to the Energy Capital website. Red Oak evidently started commercial operation in 2002.

The five California generation facilities, together accounting for 320 MW, include the 122-MW Midway peaking plant in Firebaugh, Calif., as well as the CalPeak portfolio of four natural gas-fired plants totaling 198 MW in Escondido, Firebaugh, San Diego and Vacaville, Calif.

Carlyle is acquiring the Midway plant from an affiliate of Starwood Energy Group Global and the CalPeak portfolio from the Blackstone Group L.P.’s GSO Capital Partners as well as affiliates of Starwood and Tyr Energy.

Equity capital for the transactions, terms of which were not disclosed, comes from Carlyle Power Opportunities Capital Partners, a power managed account, and Carlyle Infrastructure Partners, a $1.2bn infrastructure fund. The Red Oak acquisition is subject to customary closing conditions.

The acquisitions, which were executed in conjunction with Carlyle’s power affiliate Cogentrix, bring the total enterprise value of power asset transactions since Carlyle funds acquired Cogentrix in late 2012 to more than $1.2bn, Carlyle said.

“Since Carlyle funds acquired Cogentrix, our power team has committed approximately $600 million of equity capital,” said Carlyle Managing Director and Cogentrix Chairman Robert Mancini.

Carlyle purchased Cogentrix from Goldman Sachs Group in 2012.

“The North American power generation sector is evolving, and we see significant opportunities, both in the form of acquisitions and development, to create value for our investors,” Mancini said.

Starwood peaker came online in 2009

The Midway simple-cycle gas plant was developed and constructed by Starwood Energy, achieved commercial operations in May 2009, Starwood said in its own statement. The facility is party to a tolling agreement with Pacific Gas & Electric which runs through 2024. 

“We are pleased to have completed this transaction with Carlyle.  Midway has been a longterm value-add investment for Starwood and we are excited to transition ownership to another experienced and capable team,” said Starwood Energy Vice President Alex Daberko.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.