Tri-State announced on Oct. 4 it has agreed to purchase a 272-megawatt natural gas-fired combined cycle power plant in Fort Lupton, Colo. The association will acquire 100 percent of the equity interests in the Thermo Cogeneration Partnership (TCP) from affiliates of Starwood Energy Group, a private investment firm focused on energy investments based in Greenwich, Conn.
TCP holds the assets associated with the power plant. The transaction, the terms of which were not disclosed, is subject to customary consents and is anticipated to close in approximately six weeks.
“The acquisition of this natural gas power plant complements our existing generating resources to serve our growing member cooperatives’ loads,” said Tri-State executive vice president and general manager Ken Anderson. “It further diversifies our resource fleet and provides important load-following capabilities in a high-growth part of our four-state system.”
In 2010, Tri-State’s load grew 5.5 percent – largely driven by industrial development in the rural communities served by electric cooperatives – which was approximately three times the national average growth rate for U.S. electric utilities.
Tri-State has been purchasing 150 megawatts of power from the Fort Lupton plant under a 10-year tolling agreement with TCP that began in July 2009. TCP is also under contract to provide 122 megawatts of capacity to a third party, which will continue to be fulfilled through 2019.
“We are very pleased to have reached this agreement with Tri-State,” said Brad Nordholm, CEO of Starwood Energy Group. “Tri-State is a well-managed organization that will be an excellent steward for TCP, its employees, its customers and the local community. This is an excellent result for Starwood Energy and our investors.”
The facility, which was constructed in 1994, currently employs a workforce of approximately 25 people.
“Our plans are to own the facility for the long-term. We are evaluating several modernization projects to enhance its efficiency and reliability,” Anderson said. “This has ben a well-managed plant and we look forward to eventually transitioning the existing employees into Tri-State’s workforce.
“The purchase of this power plant presented a solid business opportunity for Tri-State and a great value to our member electric cooperatives,” Anderson said. “We will continue to move forward to develop additional resource opportunities, keeping open all of our fuel and technology options in order to provide the most benefit to our membership.”