Canada's Capital Power to acquire two US gas power plants for $1.1bn
Canada-based energy company Capital Power on November 20 announced that it will acquire two gas-fired power plants in the US for $1.1bn. The acquisitions are expected to close in the first quarter of 2024, subject to regulatory approvals.
The first acquisition involves the purchase of a 100% equity stake in CXA La Paloma, which owns the 1,062 MW La Paloma natural gas-fired generation facility in Kern County, California. The second acquisition, which Capital Power will undertake in partnership with BlackRock, involves the purchase of a 100% equity stake in New Harquahala Generation Company, which owns the 1,092 MW Harquahala natural gas-fired generation facility in Maricopa County, Arizona.
Under the terms of the Harquahala acquisition, Capital Power and BlackRock will form a 50/50 partnership, with each company responsible for funding 50% of the cash consideration. Capital Power will also be responsible for the operations, maintenance, and asset management of the Harquahala facility, in exchange for which it will receive an annual management fee.
"Capital Power's acquisition of La Paloma and the partnership in Harquahala's gas generation assets marks a significant milestone in our strategic growth," said Avik Dey, CEO of Capital Power. "These plants are well positioned to bolster our current portfolio and align with our commitment to providing reliable, affordable power solutions that support a balanced approach to the energy transition."
Following the closing of the acquisitions and accounting for Capital Power’s previously announced acquisition of the Frederickson 1 generating station, the company’s flexible and reliable gas-fired generation fleet is expected to be the 5th largest in North America, it said.
Capital Power owns approximately 7,500 MW of power generation capacity at 29 facilities across North America. Projects in advanced development include approximately 213 MW of renewable generation capacity in Alberta and North Carolina, 512 MW of incremental natural gas combined cycle capacity from the repowering of Genesee 1 and 2 in Alberta, and approximately 350 MW of natural gas and battery energy storage systems in Ontario.