Brookfield Renewable Energy Partners LP (TSX: BEP.UN) (NYSE: BEP) on Oct. 8 announced an agreement to acquire a hydroelectric portfolio in Pennsylvania from Talen Energy (NYSE: TLN) for $860 million.
Brookfield Renewable will acquire and fund the transaction with institutional partners and maintain an economic interest in the portfolio of approximately 40%. A portion of the purchase price will be funded with third party investment grade, non-recourse financing expected to close concurrently with the transaction.
The portfolio consists of two facilities, the 252-MW Holtwood station on the Susquehanna River and the 40-MW Wallenpaupack station on Lake Wallenpaupack in the Pocono Mountains, with a combined expected average annual generation of approximately 1.1 million megawatt hours.
The acquisition provides a strong fit with Brookfield’s 417-MW Safe Harbor facility located eight miles upstream from Holtwood. All output is currently sold into the PJM Interconnection market and the portfolio benefits from a diverse revenue stream including energy, capacity, renewable energy credits and ancillary services. Both Holtwood and Wallenpaupack have long-term FERC-issued operating licenses that run through 2030 and 2045, respectively.
“These high-quality assets provide a unique opportunity to leverage our operating platform and hydroelectric expertise in a market facing significant coal retirements and increasing reliance on renewables,” said Sachin Shah, Chief Executive Officer of Brookfield Renewable.
The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the first quarter of 2016.
Brookfield Renewable Energy Partners operates one of the largest publicly-traded, pure-play renewable power platforms globally. Diversified across 75 river systems and 14 power markets in North America, Latin America and Europe, its portfolio is primarily hydroelectric and totals more than 7,000 MW of installed capacity.