ENGIE spins off hydro pumped storage assets in Northeast

In addition to selling off 8,700 MW of fossil generation in the United States, ENGIE Group said Feb. 25 that it is also divesting more than 1,300 MW of hydroelectric and pumped storage assets in the Northeast.

Dynegy (NYSE:DYN) and Energy Capital Partners announced the same day that they have formed a joint venture, called Atlas Power, to buy ENGIE’s U.S. fossil portfolio consisting of 8,731 MW of generation capacity located in the ERCOT, PJM, and ISO-New England (ISO-NE) market regions.

ENGIE, also known as GDF Suez, is a multinational energy company. ENGIE said Feb. 25 that the two definitive agreements allow it to shed 10 GW of merchant generation capacity in the United States.

The non-fossil asset deal involves a sale of both pumped storage and 200 MW of conventional hydro assets located in Massachusetts and Connecticut from ENGIE’s FirstLight affiliate. The assets will be acquired by Public Sector Pension Investment Board (PSP Investments), one of Canada’s largest pension investment funds, for an enterprise value of $1.2bn (U.S.).

The Northeast deal involves the Northfield Mountain pumped storage facility in Massachusetts.

The two North American deals will result in a reduction of €4.1bn of the consolidated net debt of ENGIE.

“PSP Investments is extremely pleased with the acquisition of these significant hydroelectric facilities which form an important component of the Eastern U.S. energy market,” said Guthrie Stewart, Senior Vice President, Global Head of Private Investments at PSP Investments. “The purchased assets are an excellent fit with PSP Investments’ long-term investment horizon and its strategy to leverage industry-specialized platforms, such as H2O Power,” Stewart added.

The assets to be acquired are core operational merchant hydroelectric facilities located primarily on the Connecticut River in Massachusetts and the Housatonic River in Connecticut. They constitute the 2nd largest privately-owned hydroelectric portfolio within the well-developed and functional ISO New-England (ISO-NE) power market, PSP said.

They include the 1,168MW Northfield Mountain pumped-storage facility as well as 12 conventional hydroelectric facilities, the three largest of which represent an aggregate generation capacity of 134MW. The portfolio generates Renewable Energy Credits. Majority-owned by PSP Investments, H2O Power currently owns and operates 10 hydroelectric generating stations located in Canada and the United States, representing 170MW of power generation capacity.

The closing of the transaction is subject to customary closing conditions, including regulatory approvals.

 

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.