Energy infrastructure company Sempra Energy has completed the sale of its U.S. renewables business and non-utility natural gas storage assets for roughly $2.5 billion in cash, Kallanish Energy reports.
The announcement comes with Monday’s completion of the sale of its remaining ownership interests in operating and development-stage wind assets to American Electric Power for $584 million in cash.
“We have a long and successful track record of actively managing our portfolio, including exiting businesses that are no longer consistent with our strategy,” said Joseph A. Householder, president and chief operating officer of Sempra.
Proceeds from the asset sales will be used to pay down debt and redeploy capital to support Sempra in North America, Householder said.
The sale to Aep included roughly 724 megawatts of net operating capacity comprising wind farms in Minnesota and Michigan, as well as Sempra’s interests in jointly-owned projects with BP Wind Energy in Hawaii (wind and battery storage), Kansas, Pennsylvania, Colorado, and Indiana.
Aep also acquired all of Sempra Energy’s wind projects currently in development.
“The addition of these high-quality renewable assets and the experience of our (20) new employees will support our long-term strategy to diversify our generation fleet. The long-term contracts and attractive returns associated with these existing assets will be immediately accretive to earnings and solidify our projected 5% to 7% earnings growth rate,” said Nicholas K. Akins, Aep chairman, president and CEO.
In February, Sempra Energy completed the sale of its non-utility U.S. natural gas storage facilities to an affiliate of private equity firm ArcLight Capital Partners for $328 million in cash.
In December 2018, Sempra Energy completed the sale of its U.S. solar assets and battery storage development projects, as well as its ownership interest in one wind facility, to Consolidated Edison for roughly $1.6 billion.
The company also is in the process of selling its equity interests in its South American businesses, including its 83.6% stake in electric utility Luz del Sur S.A.A. in Peru and 100% stake in power distribution and trading company Chilquinta Energía S.A. in Chile.
Credit Suisse and J.P. Morgan served as Sempra Energy’s lead financial advisors and Latham & Watkins LLP its legal advisor on the sale of the wind portfolio.
| Asset | MW Net* | Off-taker | COD | PPA Expiry | Turbine | O&M | |
| BP JV Projects | Fowler Ridge 2 (IN) | 100 | AEP Ohio, Vectern, Inidiana Michigan Power | 2009 | 2029 | GE | Vestas |
| BP JV Projects | Cedar Creek 2 (CO) | 124 | Xcel Energy | 2011 | 2035 | GE, Nordex | Vestas |
| BP JV Projects | Flat Ridge 2 (KS) | 235 | AECI, Southwestern Electric Power Company, | 2012 | 2036 | GE | GE |
| BP JV Projects | Meoopany (PA) | 70 | ODEC, SMECO | 2012 | 2032 | GE | GE |
| BP JV Projects | Auwahi (HI) | 11 | Maui Electric | 2012 | 2032 | Seimens | Seimens |
| Total | 540 | ||||||
| 100% Owned | Black Oak Getty (MN) | 78 | MMPA | 2016 | 2036 | Vestas | Vestas |
| 100% Owned | Apple Blossom (MI) | 100 | Consumers Energy | 2017 | 2033 | Vetas | Vestas |
| Total | 178 | ||||||
| Total Overall | 718** | 16 yrs*** |
* Reflects AEP’s share, ** Excludes 6 MW of Auwahi battery storage, *** Based on weighted average contract life
Source: AEP
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