Capital Power wraps up acquisition of 1GW La Paloma natural gas-fired plant

February 12, 2024 | by magnews24.com

The company has also secured approval from the US Federal Energy Regulatory Commission for the acquisition of New Harquahala Generation, which is the holding company of the 1.09GW Harquahala natural gas-fired power facility in Maricopa County, Arizona


Capital Power

Capital Power completes acquisition of 1.06GW La Paloma natural gas-fired power plant in California. (Credit: Erdenebayar Bayansan from Pixabay)

Canada-based Capital Power has wrapped up its previously announced acquisition of 100% of CXA La Paloma, which owns the 1.06GW La Paloma natural gas-fired power plant located in Kern County, California.

Besides, the company has secured approval from the US Federal Energy Regulatory Commission (FERC) for the acquisition of New Harquahala Generation.

New Harquahala Generation is the holding company of the 1.09GW Harquahala natural gas-fired power facility in Maricopa County, Arizona.

It will be acquired by a 50-50 partnership between Capital Power Investments and an affiliate of a fund managed by BlackRock’s Diversified Infrastructure business.

The completion of the Harquahala deal, which is expected this month, will take place along with the closing of about $442m of combined term loans, letter of credit loans, and revolving loans.

The La Paloma natural gas-fired plant started commercial operation in 2003 while the Harquahala facility commenced operations in 2004.

According to Capital Power, the La Paloma plant has secured resource adequacy contracts through 2029 with various investment grade utilities and load serving entities.

The Harquahala natural gas-fired plant also has 100% contracted tolling agreement through 2031 with an investment grade utility.

Announced in November 2023, the transactions represent a net purchase price of $1.1bn for Capital Power, subject to working capital adjustments.

In December, the Canadian company also completed a deal worth $97.5m to acquire a 50.15% stake in the 265MW Frederickson 1 Generating Station in Washington, US.

Capital Power said that the deals make its gas-fired generation fleet the fifth largest in North America.

Through the transactions, the company also aims to create additional growth opportunities for both its gas-fired and renewable generation businesses.

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