JERA to buy 50% stake in Starwood Energy’s 1.12GW US thermal power plants

Energy acquisition news : Japanese energy company JERA has agreed to acquire a stake of 50% in three natural gas-fired thermal power plants in the US, with a combined capacity of 1,123MW, from private equity firm Starwood Energy Group Global for an undisclosed price.

The three thermal power plants, collectively called as Compass Power Generation, are all located in the northeastern part of the US, and comprise the 840MW Marcus Hook Energy Center, the 173MW Dighton power plant and the 160MW Milford power plant.

JERA, which is a 50:50 joint venture of the Japanese electric firms TEPCO Fuel & Power and Chubu Electric Power Company, is carrying out the transaction through its US subsidiary JERA Americas.

While the Marcus Hook Energy Center is located in suburban Philadelphia, Pennsylvania, the Dighton power plant and Milford power plant are in Massachusetts.

Marcus Hook Energy Center is an 840MW natural gas-fired thermal power plant in Philadelphia.
Marcus Hook Energy Center is an 840MW natural gas-fired thermal power plant in Philadelphia. Photo courtesy of Starwood Energy Group Global, LLC.

Marcus Hook Energy Center sells its power and capacity primarily to the PJM Interconnection wholesale electricity market. The 840MW thermal power plant in Philadelphia also has a contract for capacity with the Long Island Power Authority.

Starwood Energy acquired the Marcus Hook Energy Center from NextEra Energy for about $765 million in November 2016.

On the other hand, the power and capacity of the Dighton power plant and Milford power plant are sold into the ISO New England. The Dighton power plant and Milford power plant were acquired by Starwood Energy for a total of $119 million from Dynegy in July 2017.

After completion of the transaction with Starwood Energy, JERA Americas will take part in the operation of the three US thermal power plants.

Himanshu Saxena – CEO of Starwood Energy said: “We are thrilled to have JERA as a partner in this portfolio. JERA’s worldwide expertise will provide significant value as we continue to operate and expand the facilities.”

Recently, JERA completed acquisition of 50% stake in the 972MW Linden Cogeneration Facility, which is a natural gas-fired thermal power project, located in northern New Jersey.

After closing the deal with Starwood Energy for the three thermal power plants, JERA will take its net ownership of power generation in North America to nearly 3.53GW.

Toshiro Kudama – CEO of JERA Americas and Senior Executive Vice President at JERA said: “JERA is committed to significantly expanding our long-term presence in North America by using a disciplined approach to build a portfolio of gas-fired and renewable generation facilities.

“These plants are all in excellent locations close to customer demand and are strong additions to our growing portfolio.”

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