Capital Power, a Canada-based power producer, has entered a $100m (C$137m) deal to purchase a 50.15% stake in the 265MW Frederickson 1 generating station from Atlantic Power & Utilities.
Located in Pierce County, Washington, US, Frederickson 1 is a gas-fired combined-cycle power plant that started operations in 2002.
The plant features a combined-cycle configuration with a GE 7FA turbine, a Nooter Eriksen three-pressure heat recovery steam generator and a GE A-11 condensing steam turbine and steam turbine generator.
It is interconnected via the Bonneville Power Administration in the Western Electricity Coordinating Council region.
The 125MW of electricity generated from the plant is sold to Morgan Stanley Capital Group under an agreement valid until September 2025.
Atlantic Power indirectly holds a 50.15% interest in the project. The remaining 49.85% stake is owned by Puget Sound Energy.
Capital Power plans to use cash on hand and credit facilities to fund the transaction.
Once acquired, it will operate and maintain the facility, receiving an annual management fee for operations and maintenance services.
The deal awaits regulatory clearance, with completion expected in the fourth quarter of 2023.
Capital Power president and CEO Avik Dey stated: “We are pleased to acquire this high-quality facility in the Pacific Northwest. Consistent with our mid-life natural gas strategy, this acquisition expands our portfolio of dispatchable assets in key markets that support the energy transition by providing reliable, affordable and flexible power while renewables grow and decarbonisation solutions develop.”
Capital Power senior vice-president and chief commercial officer Bryan DeNeve stated: “Frederickson 1 is a strategically located mid-life natural gas asset in the growing load centre of the Puget Sound region and will provide accretive near-term cash flows.
“The facility is supported by long-term contracts out to October 2030 with credit-worthy counterparties and is well-positioned for re-contracting as a key dispatchable baseload asset in the region.
“Additionally, the facility and adjacent lands provide ample room and infrastructure for future non-emitting, flexible generation developments co-located with the facility.”
