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Starwood Energy to sell 50% stake in 1,173-MW gas portfolio to Japanese firm

Private investment firm Starwood Energy Group Global LLC agreed to sell a 50% equity stake in an 1,173-MW gas-fired portfolio in the northeastern U.S. to JERA Co. Inc. for an undisclosed sum.

The portfolio consists of the 840-MW Marcus Hook facility in Pennsylvania and the 173-MW Dighton and 160-MW Milford power plants in Massachusetts. The Marcus Hook plant sells its output into the PJM Interconnection market. It also has a contract for capacity with the Long Island Power Authority. The Dighton and Milford facilities sell their output into the ISO New England market.

Starwood acquired Marcus Hook in November 2016 from NextEra Energy Resources LLC and Milford and Dighton in September 2017 from Dynegy Inc. The portfolio was combined and refinanced in the term loan B market in December 2017, the firm said in an Aug. 9 news release.

According to S&P Global Market Intelligence data, Marcus Hook produced 5,442,321 MWh in 2017, with a capacity factor of 73.35%. The facility sells 685 MW of electricity to LIPA under a 20-year contract ending in June 2030.

The transaction will increase JERA's power portfolio in North America to approximately 3,536 MW. "JERA also intends to utilize expertise developed in the US merchant markets in Japan in anticipation of the forthcoming functional unbundling of Japanese power markets," it said in an Aug. 10 announcement.

Upon completion of the deal, JERA subsidiary JERA Americas Inc. will participate in the operation of the plants.

Credit Suisse served as exclusive financial advisor to JERA, a joint venture between TEPCO Fuel & Power Inc. and Chubu Electric Power Co. Inc.