AltaGas through its wholly-owned subsidiary AltaGas Power Holdings has acquired a 507MW natural gas-fired combined cycle plant, associated major spare parts, and 230kV 67 mile long electric transmission line, for $515m from Blythe Energy.
The acquisition is expected to increase AltaGas’ earnings and cash flow per share in 2014.
Under a power purchase agreement (PPA), the electricity produced at the plant will be supplied to Southern California Edison (SCE) through July 2020.
Upon the completion of the PPA contract with SCE, the electricity generated will be sold to other market participants.
AltaGas chairman and CEO David Cornhill said the acquisition of the Blythe gas-fired combined cycle plant will add to the company’s energy infrastructure portfolio in US and provides it with another platform to meet the increasing demand of clean energy.
"The power purchase agreement provides stable earnings and cash flow and with the infrastructure in place today, the facility is well positioned to access two premium power markets in California and Arizona in the future," Cornhill added.
The natural gas-fired Blythe plant, which is located in Blythe, California, is directly connected to Southern California Gas and interconnects with SCE and the California Independent System Operator through a 67 mile transmission line.
The transmission line is capable of transmitting 1,100MW of electricity and has excess capacity to meet future load growth.