PSB approves sale of Vermont dams

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PSB approves sale of Vermont dams

Sat, 04/15/2017 - 11:37am -- tim

by Timothy McQuiston Vermont Business Magazine ArcLight Capital Partners, based in Boston, was granted an amended certificate of public good by the Vermont Public Service Board on April 6 that will allow its affiliate, Great River Hydro, to acquire TransCanada’s New England hydroelectric power portfolio for $1.065 billion. The dams include those on the Connecticut and Deerfield rivers in Vermont. All workers are expected to be retained, ArcLight said when it announced the deal November 1, 2016. The state of Vermont formed a committee and briefly considered purchasing the dams itself after TransCanada announced in March of this year that it would sell the hydro plants to help it buy a Texas gas pipeline company. The state also considered buying the facilities in 2005, when USGen ultimately sold them to Calgary-based TransCanada for $505 million.

With 13 facilities on the Connecticut and Deerfield rivers in Vermont, New Hampshire and Massachusetts, TransCanada’s 584 MW renewable power portfolio is the largest conventional hydro system in New England. Vermont Yankee, by comparison, had a running output of 605 MW before it closed in December 2014. The TransCanada portfolio includes the 192 MW Moore facility, the largest conventional hydro station in New England, and 12 other facilities totaling 530 MW, according to the PSB. The transaction is expected to close in mid-2017.

TransCanada map and table of hydro assets.

According to the Valley News, in a story published last year, the Wilder dam paid $750,000 in annual tax revenue to Hartford in 2016, or about 6 percent of the town’s total tax revenue and Lebanon, NH, got $563,000 in tax revenue for the city during the year’s first half period, according to online tax records.

In a long-running dispute between TransCanada and the town of Rockingham, the Vermont Supreme Court ruled in September 2016 that the Bellows Falls facility should be assessed at $127.4 million, not the $84 million TransCanada wanted.

On a per megawatt basis, the ultimate sale of all the hyrdro stations was just over what TransCanada wanted in Bellows Falls ($1.8 million per MW versus $1.7 million) and 44 percent lower than what the Supreme Court ruled ($2.6 million per MW).

Great River Hydro said in a statement that it anticipates a smooth transition of ownership. The company has committed to retain all existing operational personnel, plans to assume the recently negotiated union contract, and will continue the FERC relicensing process currently underway at the Bellows Falls, Wilder and Vernon facilities.

ArcLight Capital is one of the most experienced owners and operators of renewable power assets in the United States, said in a press release. Founded in 2001, the firm has invested more than $3.1 billion of capital in renewable power assets, representing approximately 5,000 MW of generation. The firm has successfully led some of the most notable renewable projects in the United States, including developing and operating one of the largest wind farms in the world. The firm is committed to maintaining strong partnerships with employees, host communities, states and other local stakeholders.

ArcLight also has over a decade of experience owning and operating hydroelectric power generation facilities in New England. Since 2006, ArcLight has acquired and operated 10 hydro facilities along the Penobscot, Union and Androscoggin rivers in Maine.

Bellows Falls Island Hydro 1. VBM photo

Great River Hydro will be led by Scott Hall, a long-term portfolio executive of ArcLight with over 27 years of experience managing hydroelectric generating facilities and companies in the Northeast. Mr. Hall has been directly responsible for all facets of hydroelectric company operations, including employee management, environmental compliance, facility maintenance and operations, and business development activities. Hall has also been an active leader in a variety of stakeholder processes that addressed numerous socio-economic issues related to river flows, energy development and natural resource management.

“We have been incredibly impressed by the quality of both the hydroelectric facilities and the operations team,” Hall said last November. “I am very excited to work with the team to continue the level of excellence they have already achieved in providing reliable, renewable power in Vermont, New Hampshire and Massachusetts.”

“We are thrilled to expand our renewable footprint by acquiring these premier hydroelectric assets from TransCanada,” said Dan Revers, Managing Partner and co-Founder of ArcLight. “New England is a key geography for ArcLight, and we look forward to working with local communities and other constituencies across the region.”

TransCanada Hydro

  • Connecticut River: Vermont and New Hampshire – 49-MW Bellows Falls, 144-MW Comerford, 11-MW McIndoes, 192-MW Moore, 37-MW Vernon and 41-MW Wilder
  • Deerfield River Vermont -- 41-MW Harriman and 5-MW Searsburg
  • Massachusetts – 7-MW Deerfield No. 2, 7-MW Deerfield No. 3, 6-MW Deerfield No. 4, 14-MW Deerfield No. 5 and 6-MW Sherman

There are approximately 85 hydroelectric generation facilities operating in Vermont and on waters bordering other states. More than a third of those are owned by Green Mountain Power.

Source: Vermont PSB, 4.6.2017. ArcLight Capital Partners. TransCanada. 11.1.2016