Highstar to acquire two CCGT generation facilities in Arizona from LS Power

Source: Highstar Capital

Highstar Capital announced that it has reached agreement with LS Power to acquire 100 percent of the equity interests of the Arlington Valley and Griffith power generation plants located in Arizona. These plants are modern, efficient, combined-cycle gas turbine generation facilities with summer period tolling agreements. 

This is Highstar’s third major power generation investment. Previous investments have included a 50 percent interest in InterGen, a global power generation business with operations in the United Kingdom, the Netherlands, Mexico and Australia, and a 50 percent interest in Northern Star Generation, a principally contracted U.S. power generation business with operations in six states. 

Commenting on the investment, Highstar Founder and Managing Partner, Christopher Lee stated, “Arlington Valley and Griffith are favorably positioned, both in terms of the power end-markets and the off-takers they serve, as well as by their close proximity and direct transmission connections to large, liquid electricity trading hubs in Arizona, Nevada and Southern California. 

We believe that the current and prospective dynamics around power generation and distribution in North America, particularly with respect to clean, efficient, combined cycle natural gas power generation plants like Arlington Valley and Griffith, are quite compelling. These plants' attractive current contracts provide a stable base of cash flows through the medium term, enabling them to benefit from increasing power prices due to tightening reserve margins and the effects of environmental legislation over the longer term. 

Arlington and Griffith are intended to serve as the basis for building our third power generation business, drawing on our long experience in this attractive sector.” 

The transaction is subject to customary regulatory approvals. 

Barclays Capital acted as exclusive financial advisor and Morgan, Lewis & Bockius LLP acted as legal counsel to Highstar Capital.

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