TerraForm Power, Inc. (Nasdaq:TERP) an owner and operator of clean energy power plants, today announced the acquisition of 23 MW of operating distributed solar power plants from a wholly owned subsidiary of Integrys Energy Group, Inc., a leading energy holding company focused on regulated energy delivery in the United States. The full nameplate capacity on these 48 projects is 34 MW, with TerraForm Power’s net ownership position representing 23 MW.
The solar projects are located throughout Arizona, California, Connecticut, Massachusetts, New Jersey and Pennsylvania. The assets were placed into operation between 2008 and 2013, and are contracted under long term power purchase agreements (PPAs) with a variety of commercial and municipal entities having a weighted-average credit rating of Baa2. The contracts have a weighted average remaining life of 15 years.
These plants are expected to generate average levered CAFD of approximately $5 million annually over the next 10 years. The equity consideration to be paid for the acquisition is $45 million. In addition, TerraForm Power will assume $10 million in project debt. This represents an expected levered cash-on-cash return of greater than 9%. TerraForm closed the acquisition on June 3, 2015 utilizing existing balance sheet liquidity.
“We are grateful for the opportunity to work with Integrys, one of the country’s leading utilities. This acquisition demonstrates TerraForm’s continued leadership in the distributed generation segment and depth of utility relationships which continue to accelerate our growth trajectory,” said Alex Hernandez, Chief Financial Officer of TerraForm Power.
About TerraForm Power
TerraForm Power is a renewable energy leader that is changing how energy is generated, distributed and owned. TerraForm Power creates value for its investors by owning and operating clean energy power plants.
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