AltaGas Ltd. announced it has entered into an agreement for the acquisition of Blythe Energy, LLC for $515 million through its indirect wholly owned subsidiary AltaGas Power Holdings (U.S.) Inc. Blythe Energy is the owner of the natural gas-fired combined cycle Blythe Energy Center and a related 230 kV 67-mile electric transmission line in Southern California.
According to the announcement, the 507 MW Blythe Energy Center is contracted under a Power Purchase Agreement (PPA) with Southern California Edison through to July 2020. Contract provisions match PPA revenues to all major plant costs.
"The Acquisition of Blythe is an important addition to our 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," said David Cornhill, Chairman and CEO of AltaGas. "The addition of natural gas-fired power generation to our energy infrastructure portfolio in the US provides another platform for growth to meet the increasing demand for clean sources of energy."
AltaGas said the acquisition is anticipated to grow earnings and cash flow per share in 2014 and is expected to add approximately $50 million in incremental contracted EBITDA per year. The deal is slated to close in the second quarter.