A subsidiary of AltaGas Ltd (TSE:ALA) announced Nov. 30 that it has successfully completed the acquisition of GWF Energy Holdings LLC, which holds a portfolio of three natural gas-fired electrical generation facilities in Northern California totaling 523 MW.
AltaGas Power Holdings (U.S.) has closed the deal that involves 330-MW Tracy plant, the 97-MW Hanford plant and the 96-MW Henrietta facility. AltaGas is buying the facilities for a purchase price of approximately (U.S.) $642m.
AltaGas already owns gas-fired power plants in California and Alberta. AltaGas owns the rights to power output and ancillary services from 353 MW of coal-fired base-load generation in Alberta until December 31, 2020, according to its website.
AltaGas has gotten its approval from the Federal Energy Regulatory Commission (FERC) earlier in November. GWF Energy Holdings is currently part of Highstar Capital IV.
The facilities are fully contracted under Power Purchase Agreements (PPAs) with Pacific Gas & Electric until the fourth quarter of 2022. The PPAs are structured as tolling arrangements for 100% of the energy, capacity and ancillary services.
The facilities are well-positioned for re-contracting upon expiry of the PPAs in 2022, being strategically located in areas of growing demand and benefiting from California’s evolving need for flexible capacity to incorporate renewable energy.
The demand for cleaner energy sources and backstopping of renewables through fast-starting, reliable and versatile generation continues to be strong in California and is a key driver for future reliance on natural gas-fired electrical generation, like that offered by the gas plants, AltaGas said.
“This acquisition is an important addition to our energy infrastructure portfolio and fits well with our strategy of adding to our stable, long life asset base,” said AltaGas Chairman and CEO David Cornhill. “The addition of natural gas-fired power generation in northern California further diversifies our growth opportunities while also meeting the increasing demand for clean sources of energy and capitalizes on the renaissance of natural gas.”
AltaGas describes itself as an energy infrastructure business with a focus on natural gas, power and regulated utilities. AltaGas creates value by acquiring, growing and optimizing its energy infrastructure, including a focus on clean energy sources.