JEMB Realty-backed venture buys stake in New York power plant

East River FundCo LLC, a partnership of JEMB Family LP, a privately-held real estate and energy investment firm, and Harbert Power Fund V, have increased their investment in Astoria Project Partners, the legal entity that owns and operates the Astoria I natural gas-fired power plant in Queens, N.Y.

Together with EIF Astoria LLC, a subsidiary of MyPower Corp., wholly owned by Mitsui & Co. Ltd., the JEMB/Harbert partnership said Dec. 1 that it has acquired the 21% minority interest in Astoria Project Partners from SNC-Lavalin Inc. Additional terms of the deal were not disclosed.

JEMB Family, which was an original sponsor and has been an investor in the Astoria Energy projects since 2003, is affiliated with JEMB Realty Inc. of New York City.

Astoria Energy I went into service in 2006, providing 550 MW of gas-fired energy into the New York City power grid. Astoria Energy II went into service in 2011, doubling the facility’s total output.

“Astoria Project Partners has an extremely strong management team, we have a first-class ownership group, and the experienced professionals from Harbert Power are a great partner in this enterprise,” said Morris Bailey of JEMB Family. “We are extremely pleased to have been part of these projects since the inception, through construction and into operation, providing reliable power to New York City.”

The project company is an IPP (Independent Power Producer) business that operates a gas-fired combined cycle power station in New York City, one of the major power consuming regions in the U.S. The project currently supplies power to a subsidiary of Consolidated Edison under a power purchase agreement (PPA) through May 2016. After the term of the PPA, the project backers plan to sell electricity to the New York electricity market.

Fitch Ratings had said on Oct. 24 that it understands that the recent changes in Astoria’s ownership have had no impact on day-to-day operations or project management. Mitsui purchased a 20.58% ownership stake from GDF Suez in December 2013 and partnered with JEMB Realty and Harbert Management to acquire SNC-Lavalin’s 12.35% ownership interest in October 2014. While GDF Suez is no longer majority owner, its economic interest remains the largest amongst the sponsor group, Fitch pointed out.

Astoria Energy LLC was formed to develop, construct, own, and operate this 550-MW natural gas- and diesel-fired power plant. The facility provides electric generating capacity for NYISO’s Zone J and sells the majority of its capacity and energy to Consolidated Edison under a PPA expiring May 2016. Thereafter, the project would operate as a fully merchant generator. The PPA’s rate structure is priced at a 5% discount from the prevailing market price, which is subject to a floor for capacity and energy sales and a ceiling for capacity sales, Fitch noted.

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.