Atlantic Power to buy U.S. biomass plants

DEDHAM, Mass. – Atlantic Power Corporation will acquire the equity ownership interests held by AltaGas Power Holdings (U.S.) Inc. in two contracted biomass plants in North Carolina and Michigan for US$20 million.

The acquisition is subject to the approval of the Federal Energy Regulatory Commission and customary third-party consents. Closing is expected by mid-2019. The purchase will be funded from the Company’s discretionary cash.

Craven County Wood Energy is a 48 megawatt (MW) biomass plant in North Carolina that has been in service since October 1990. Atlantic Power will acquire a 50 percent interest in the plant from AltaGas. The remaining 50 percent interest is held by CMS Energy.

Craven County has a Power Purchase Agreement (PPA) with Duke Energy Carolinas that runs through December 2027. The plant burns wood waste, including wood chips, poultry litter, forestry residues, mill waste, bark and sawdust.

Grayling Generating Station is a 37 MW biomass plant in Michigan that has been in service since June 1992. Atlantic Power will acquire a 30 percent interest in the plant from AltaGas. The remaining interests are held by Fortistar (20 percent) and CMS Energy (50 percent).

Grayling has a PPA with Consumers Energy, the utility subsidiary of CMS Energy, which runs through December 2027. The plant burns wood waste from local mills, forestry residues, mill waste and bark.

Both plants are operated by an affiliate of CMS Energy. There is no project-level debt at either plant.

“Since last summer, we have announced the acquisitions of five plants – Craven County and Grayling; the remaining ownership interests in the Koma Kulshan hydro facility, which we acquired in July; and the Allendale and Dorchester biomass plants in South Carolina, on which we expect to close later this year. The PPAs for these acquired plants run through December 2027, March 2037 and October 2043, respectively,” said James Moore, Jr., president and CEO of Atlantic Power.

“The acquisitions represent a meaningful addition to the level and length of our existing contracted cash flows, and we estimate they will contribute Project Adjusted EBITDA of $8 million to $10 million annually on average through the date of the first PPA expiration. We acquired the five plants at what we consider to be attractive prices.”

Atlantic Power is an independent power producer that owns power generation assets in nine states in the United States and two Canadian provinces.