FERC signs off on Brookfield buy of ArcLight hydro projects

The Federal Energy Regulatory Commission on Dec. 20 approved the sale of hydroelectric projects in Maine by an affiliate of ArcLight Capital Partners LLC to Brookfield Asset Management.

On Nov. 14, Black Bear Hydro Partners LLC, Black Bear Development Holdings LLC, Black Bear SO LLC (collectively the “Black Bear Companies”) and Black Bear Holding LLC filed an application for authorization for the disposition of jurisdictional facilities connected with the transaction under which Black Bear Holding will acquire 100% of the equity interests of the Black Bear Companies.

The Black Bear Companies are wholly-owned indirect subsidiaries of ArcLight Energy Partners Fund III LP. ArcLight Capital Partners manages ArcLight Fund III.

The Black Bear Companies own or control seven commission-licensed hydroelectric projects located in Maine, in the ISO New England (ISO-NE) market, with a total capacity of approximately 30.3 MW. In addition to the Black Bear Companies, Black Bear Holding will also acquire, directly or indirectly, Black Bear HVGW LLC, Bangor Pacific Hydro Associates and Topsham Hydro Partners LP, each of which owns or controls hydroelectric projects located in Maine with a total capacity of about 28.5 MW.

Black Bear HVGW is lessee and operator of Howland Project, a 1.8-MW qualifying facility located in Maine. Surrender of the license for Howland Project was accepted by FERC in June 2010. Black Bear HVGW will operate this facility under an Operating and Management agreement until it is decommissioned.

Black Bear Hydro was formed for the purpose of owning and operating five hydroelectric projects located in Maine, in the ISO-NE market: Ellsworth Hydroelectric Project, with a capacity of 8.9 MW; Medway Hydroelectric Project, with a capacity of 3.2 MW; Milford Hydroelectric Project, with a capacity of 7.8 MW; Orono Hydroelectric Project, with a capacity of 2.7 MW; and Stillwater Hydroelectric Project, with a capacity of 1.8 MW.

Black Bear Development was formed to construct and directly own two new hydroelectric facilities: a 2.2-MW facility at the Stillwater Hydroelectric Project (Stillwater Expansion): and a 3.7-MW facility at the Orono Hydroelectric Project (Orono Expansion).

Black Bear SO leases, operates, and controls the Stillwater Expansion and Orono Expansion.

Black Bear Holdings is partially, indirectly owned and controlled by its ultimate parent company, Brookfield Asset Management. Brookfield is an Ontario corporation with its principal place of business in Toronto, Ontario, Canada. It is a global alternative asset manager focused on property, renewable power, infrastructure assets, and private equity.

Brookfield Renewable Energy Partners LP (TSX: BEP.UN) (NYSE: BEP) said Nov. 1 that it has agreed, in two separate unrelated transactions, to acquire this 70-MW hydroelectric portfolio in Maine, and the remaining 50% interest in the 30-MW Malacha Hydro facility in California.

The Maine portfolio, to be acquired from affiliates of ArcLight, consists of nine 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 hydroelectric facilities are highly complementary to our existing portfolio in North America,” said Richard Legault, President and CEO of Brookfield Renewable, in the Nov. 1 announcement. “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.”

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.

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.