August 14 (Renewables Now) - US power producer Atlantic Power Corporation (NYSE:AT) has closed the acquisition of AltaGas Ltd’s (TSE:ALA) equity interests in two biomass plants with a combined capacity of 85 MW.
More specifically, Atlantic Power has bought the 50% stake that was held by AltaGas Power Holdings (U.S.) Inc in the 48-MW Craven County Wood Energy, located in North Carolina, and its 30% interest in the 37-MW Grayling Generating Station in Michigan.
Atlantic Power agreed those purchases at a total price of USD 20 million (EUR 17.9m), but paid USD 18.5 million at closing. The reason for this is the fact that it received two quarterly distributions from the Grayling asset as the transaction was executed retroactively with a closing date of January 1, 2019.
Craven County Wood Energy, which is co-owned with CMS Energy (NYSE:CMS), has been operating since October 1990 and has a power purchase agreement (PPA) with Duke Energy Carolinas that ends in December 2027. It runs on wood chips, poultry litter, forestry residues, mill waste, bark and sawdust.
On the other hand, Grayling Generating Station has been in service since June 1992 and burns wood waste from local mills, forestry residues, mill waste and bark. CMS Energy continues to hold a 50% stake in the plant, while Fortistar has 20%. The facility has a PPA with Consumers Energy, part of CMS Energy, that ends in December 2027 as well.
Atlantic Power expects the acquisition to add between USD 4 million and USD 5 million of adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) a year on average over the remaining term of the offtake contracts.
(USD 1.0 = EUR 0.894)