Canadian energy infrastructure firm AltaGas has agreed to acquire US-based Blythe Energy from affiliates of LS Power Equity Advisors for $515m.
Blythe Energy owns a 507MW natural gas-fired combined cycle plant and a 230kV electric transmission line in California.
The facility, which uses Siemens technology, is directly connected to Southern California Gas and interconnects with Southern California Edison (SCE) and the California Independent System Operator (CAISO) through a 67 mile transmission line.
The transmission line has the capacity to transmit 1,100MW of power with additional capacity to meet future load growth.
Blythe has signed a power purchase agreement (PPA) with SCE until July 2020 and has the ability to serve both the CAISO and Desert Southwest markets.
Built on a 76 acre site, the facility is also interconnected with the El Paso Natural Gas system and is situated to re-connect to the Western Area Power Administration, providing market access optionality upon expiry of the PPA in 2020.
AltaGas chairman and CEO David Cornhill said the deal is an important addition to the company's power business.
"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 said.
The transaction is subject to regulatory approval from the Federal Energy Regulatory Commission, and is expected to complete in the second quarter of 2013.
Image: Blythe energy owns a combined cycle plant that is connected to Southern California Edison through a 67 mile transmission line. Photo: Courtesy of FreeDigitalPhotos.net.