Alternative asset management company The Carlyle Group will acquire the Red Oak natural gas-fired power generation facility in Sayreville, New Jersey and five natural gas-fired power plants in California. These plants have a total combined generation capacity of 1,143MW.
Carlyle will purchase the 823MW Red Oak natural gas-fired combined-cycle power plant from Energy Capital Partners, and the transaction is subject to customary closing conditions.
Red Oak has been operating under a long-term power purchase agreement with Williams Energy Marketing through September 2022 and is part of the PJM Interconnection.
The five facilities in California include the 122MW Midway plant in Firebaugh, California and the CalPeak portfolio of four plants in Escondido, Firebaugh, San Diego and Vacaville, California, which total 198MW.
The Midway plant is being acquired from an affiliate of Starwood Energy Group Global and affiliates of Starwood and Tyr Energy, while the CalPeak portfolio will be acquired from Blackstone Group’s GSO Capital Partners.
Carlyle Power Opportunities Capital Partners and Carlyle Infrastructure Partners will provide equity capital necessary for the transactions, terms of which are not revealed.
The total enterprise value of power asset transactions by Carlyle since 2012, including the acquisition of Cogentrix, is more than $1.2bn.
In late 2012, Carlyle acquired independent power plant developer Cogentrix, a portfolio company of Carlyle Power Opportunities Capital Partners and Carlyle Infrastructure Partners.
Carlyle managing director Robert Mancini said that the Carlyle power team has committed, since the Cogentrix acquisition, approximately $600m of equity capital.
Mancini said: "Red Oak is an attractive investment because it benefits from stable cash flow generation and is strategically located in a market that should benefit from strong secular trends.
"The California plants are all highly responsive and flexible facilities that represent important resources for transmission grid support and providing reliable power during periods of peak demand within California."
Image: Carlyle agreed to acquire Red Oak natural gas-fired plant from Energy Capital Partners. Photo: courtesy of Energy Capital Partners.