The Vermont Public Service Board on April 6 approved the $1.07 billion sale of TransCanada Pipeline USA's TransCanada Hydro NorthEast Inc. subsidiary to ArcLight Capital Partners LLC unit Great River Hydro NE LLC.

TransCanada Corp. will use the proceeds from the previously approved FERC deal to help fund the $13 billion acquisition of Columbia Pipeline Group Inc.

TC Hydro will convert into a Delaware limited liability company before the transaction takes place. Upon deal close, TC Hydro's power supply contract with TransCanada Power Marketing Ltd. will be terminated and its output will then be sold on a merchant basis into the ISO New England market.

Upon the transfer of membership interests, ArcLight Fund VI may engage in a tax equity deal with one or more companies. Tax equity investors may purchase 10% to 49.9% of indirect interest in TC Hydro, while the remaining stake will remain with ArcLight Fund VI.