Eversource Energy selling fossil, hydro power plants
The new owners must keep the plants in service for at least 18 months
(Above: Merrimack Power Station)
Eversource Energy is selling three fossil-fueled power plants, two remote combustion peaker units and nine hydroelectric plants to several buyers for a combined $258 million.
In a filing Thursday with the New Hampshire Public Utilities Commission, Eversource outlined its sale of a group of fossil-fired power plants and hydropower facilities to two buyers.
Following NHPUC and other necessary approvals, closings on the transactions are expected by late December or early 2018. This change in power plant ownership will mark the completion of electric deregulation in New Hampshire and a shift in how the company procures energy for customers in the future.
As a result of the proposed sale of the company’s power plants, Eversource New Hampshire customers will realize the benefits of a comprehensive restructuring and rate stabilization agreement entered into in 2015.
The NHPUC in 2016 established the power plant auction process, which is being managed by J.P. Morgan. Under the proposed sales, which must be reviewed and approved by the NHPUC, Eversource’s three large fossil generation facilities and two remote combustion turbines will be purchased by Granite Shore Power LLC, a newly-formed 50-50 partnership between Atlas Holdings of Greenwich, Connecticut and Castleton Commodities International of Stamford, Connecticut for $175 million.
The company’s nine hydroelectric facilities will be acquired by Hull Street Energy, LLC and affiliates, an electric industry-focused private equity firm based in Bethesda, MD, for $83 million.
As part of the proposed purchase agreements, the new owners must keep the plants in service for at least 18 months, and must honor a comprehensive employee benefits package established by Eversource and the International Brotherhood of Electrical Workers (IBEW). Moreover, Eversource will provide three years of tax stabilization payments to communities to the extent a power plant is sold for less than its assessed value.
Consistent with the 2015 settlement agreement, customers will also benefit from Eversource’s agreement to forego recovery of $25 million related to the Merrimack Station emission reduction ‘scrubber,’ and from the financing of stranded costs remaining after the sales through the use of securitization bonds. These bonds take advantage of low interest rates. In addition, Eversource has agreed to provide $5 million from its shareholders to establish a Clean Energy Fund. Details regarding the Clean Energy Fund will be established via a collaborative process overseen by NHPUC Staff and the Office of Energy and Planning.
The decision to sell Eversource’s plants implements New Hampshire state public policy objectives and was part of a comprehensive 2015 agreement among Eversource and other parties, including State Sens. Jeb Bradley and Dan Feltes; the NH Office of Energy and Planning; the NH Office of Consumer Advocate; and designated staff members of the NHPUC.
Other signatories to the agreement included: IBEW, Local 1837; the Conservation Law Foundation; TransCanada Hydro Northeast Inc. and TransCanada Power Marketing, Ltd.; and the New Hampshire Sustainable Energy Association.
Fossil Assets – 1,130.1 MW total nameplate capacity:
· Merrimack Station, Bow; Coal/oil; 502.0 total MW
· Newington Station, Newington; Oil and/or natural gas; 416.0 MW
· Schiller Station, Portsmouth; Coal/oil/biomass; 171.7 total MW
· Lost Nation, Groveton; Oil; 18.0 MW
· White Lake, Tamworth; Jet fuel; 22.4 MW
Hydro Assets – 68.2 MW total nameplate capacity:
· Amoskeag Hydro, Manchester; 16.0 MW
· Ayers Island, Bristol; 8.4 MW
· Canaan Hydro, West Stewartstown; 1.1 MW
· Eastman Falls, Franklin; 6.4 MW
· Garvins Falls, Bow; 12.1 MW
· Gorham Hydro, Gorham; 2.2 MW
· Hooksett Hydro, Hooksett; 1.6 MW
· Jackman Hydro, Hillsborough; 3.2 MW
· Smith Hydro, Berlin; 17.2 MW
Eversource serves more than 500,000 homes and businesses in 211 New Hampshire cities and towns.