Capital Power acquires two gas-fired plants in California, Arizona
Capital Power Corp., an Alberta, Canada based energy company, is acquiring two different properties from CSG Investments, a subsidiary of Beal Financial Corporation.
Specifically, Capital Power is purchasing 100 percent of the equity interests in CXA La Paloma, which owns the 1,062 MW La Paloma natural gas-fired generation facility in Kern County, California.
It is also purchasing 100 percent of the equity interests in New Harquahala Generation Company, which owns the 1,092 MW Harquahala natural gas-fired generation facility in Maricopa County, Arizona. This acquisition is being done under a newly formed 50/50 partnership between Capital Power Investments and an affiliate of a fund managed by BlackRock’s Diversified Infrastructure business. Under the partnership, Capital Power and BlackRock will each be responsible for funding 50 percent of the cash consideration for the Harquahala acquisition. Further, Capital Power will be responsible for the operations and maintenance and asset management for which it will receive an annual management fee.
The net purchase price of the acquisitions attributable to Capital Power is roughly $1.1 billion. The acquisitions are each expected to close in the first quarter of 2024, subject to regulatory approvals and customary closing conditions.
“Capital Power’s acquisition of La Paloma and the partnership in Harquahala’s gas generation assets marks a significant milestone in our strategic growth,” Avik Dey, president and CEO of Capital Power, said. “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. This acquisition further unlocks an interesting market opportunity in WECC, where we can play a leading role in supporting the shift to low-carbon energy solutions through offering reliable generation while we grow our own renewables fleet. Lastly, this transaction underscores our dedication to delivering long-term value to our shareholders and advancing our position as a leader in the power generation sector.”
With these acquisitions, along with the recently announced acquisition of the Frederickson 1 Generating Station, Capital Power’s gas-fired generation fleet is expected to be the 5th largest in North America.
“We are pleased with how this strategic investment fully aligns with our financial objectives. The acquisition of La Paloma and the partnership in Harquahala offer an attractive entry point in the WECC market, are immediately accretive and maintains our investment grade credit ratings and balance sheet strength,” Sandra Haskins, SVP finance and chief financial officer of Capital Power, said.
