24 Jan, 2025

Blackstone unit will pay $1B to buy 774-MW Potomac Energy Center in Virginia

Blackstone Energy Transition Partners reached a deal to acquire the 774-MW Potomac Energy Center in Loudoun County, Virginia, for approximately $1 billion.

Blackstone Inc. said in a Jan. 24 news release that its energy-focused private equity unit has agreed to acquire the natural gas-fired power plant in Northern Virginia, but the firm did not publicly disclose the terms of the transaction. Blackstone confirmed to S&P Global Commodity Insights the approximate purchase price, initially reported by Reuters.

New York-based Blackstone will acquire the Potomac Energy Center from Ares Management Corp., the plant's owner since 2021. Potomac Energy Center was previously known as the Stonewall Combined-Cycle Project, according to S&P Global Market Intelligence data.

Santander and Jefferies LLC were Blackstone's M&A advisers on the transaction, the firm said.

Loudoun County is often referred to by utility and datacenter industry experts as the datacenter capital of the world. The Potomac plant is close to more than 130 datacenters, Blackstone noted.

"This investment underscores Blackstone's commitment to investing in the electric infrastructure required to power AI innovation," Bilal Khan, senior managing director at Blackstone Energy Transition Partners, said in a written statement.

Mark Zhu, managing director at Blackstone Energy Transition Partners, added that Potomac is "one of the most efficient gas power plants in the region and has the potential to integrate a hydrogen fuel blend in the future, which could provide future environmental benefits."

Virginia lawmakers have flagged concerns about the substantial amount of generation, along with transmission infrastructure, that will need to be added to the grid to satisfy the intense energy demands of the state's datacenter industry.

In his State of the Commonwealth Address on Jan. 13, Virginia Gov. Glenn Youngkin said the state needs to implement an "all-of-the-above" energy policy to meet the rapid demand for power.