Eversource Announces Sale of Power Plants
Sale will complete electric deregulation in New Hampshire
MANCHESTER, N.H.– 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. In a filing today with the New Hampshire Public Utilities Commission (NHPUC), Eversource outlined the details of the agreements to sell the plants 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.
“Our generation plants have proven valuable to New Hampshire customers for many years, especially during times of extreme cold or heat when additional sources of power have been needed to help meet demand. Now, we will join other utilities across New England in obtaining energy for our customers from the competitive regional wholesale energy market,” noted Eversource NH President Bill Quinlan. “Importantly, the announced transactions honor commitments made to employees and municipalities where facilities are located to ensure a smooth transition.”
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, CT and Castleton Commodities International (CCI) of Stamford, CT for a price of $175 million. The company’s nine hydroelectric facilities will be acquired by Hull Street Energy, LLC and affiliates (“Hull Street Energy”), 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 Senators 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.