Brookfield Renewable Energy Partners LP (TSX: BEP.UN) (NYSE: BEP) has agreed, in two separate unrelated transactions, to acquire a 70 MW hydroelectric portfolio in Maine, and the remaining 50% interest in the 30 MW Malacha Hydro facility in California.
Both transactions will be pursued with Brookfield Renewable’s institutional partners, the company said in a Nov. 1 statement.
The Maine portfolio, to be acquired from affiliates of ArcLight Capital Partners LLC, consists of nine hydroelectric facilities on the Penobscot, Androscoggin and Union rivers. It provides Brookfield Renewable with a strong fit with its existing 270 MW of operating capacity on the same river systems.
These hydro facilities have average expected generation of about 375,000 megawatt hours annually and about 60% of the portfolio’s output is currently sold into the New England wholesale power market, with the remainder sold under long-term contract to local utilities until 2024 and 2028. The portfolio benefits from long-term Federal Energy Regulatory Commission-issued licenses, in most cases expiring after 2029.
Brookfield Renewable and its partners have also agreed to acquire the remaining 50% interest in the 30-MW Malacha Hydro peaking facility on the Pit River in Lassen County, Calif. Brookfield Renewable acquired its initial operating interest in December 2010. All of Malacha Hydro’s output is sold under a fixed-price contract to Pacific Gas and Electric until 2028 with a natural gas indexed energy price component starting in 2017.
“These hydroelectric facilities are highly complementary to our existing portfolio in North America,” said Richard Legault, President and CEO of Brookfield Renewable. “We continue to add high quality assets in this low-price environment, which provide an attractive combination of stable, contracted revenues and strong prospects for long-term cash flow growth. Moreover, we are pleased to continue to invest in Maine and California, both important markets for us. Our knowledge of hydro and our operating expertise in these markets give us confidence in the long-term value creation potential of this portfolio.”
These buys will be funded through available liquidity and available capital from Brookfield Renewable’s institutional partners. It is expected that a portion of the purchase price will be funded with non-recourse, fixed-rate debt. These deals are subject to regulatory approvals and other customary closing conditions and are expected to close before the end of this year.
Brookfield 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 69 river systems and 12 power markets in the U.S, Canada and Brazil, the portfolio’s output is sold predominantly under long-term contracts and generates enough electricity from renewable resources to power more than three million homes on average each year.