The Vermont Public Service Board on Thursday OK’d the purchase of TransCanada’s hydro dams by Great River Hydro, a subsidiary of Boston-based ArcLight Capital Partners.
In finding that the transaction will promote the public good, the board adopted the findings of a hearing officer who said Great River is “financially sound,” “experienced in the industry” and “capable of safely and reliably operating the Vermont hydro facilities.”
At issue are six Connecticut River hydroelectric facilities: Moore, Comerford, McIndoe, Wilder, Bellows Falls and Vernon. The deal also includes seven sites on the Deerfield, including the Harriman and Searsburg stations.
TransCanada purchased the dams in 2005. Early last year, the company announced plans to sell the properties to help finance its acquisition of Houston-based Columbia Pipeline Group.
Vermont officials spent about six months considering whether the state might acquire some interest in the stations. The state in late October decided it was best not to get involved, about a week before TransCanada announced its sale agreement with ArcLight.
The sale was subject to federal and state approval, and both of those processes proceeded smoothly.
The Federal Energy Regulatory Commission in January gave its go-ahead for Great River Hydro’s acquisition of the dams, noting there had been no “comments, protests or interventions.”
The state Public Service Board took a little longer to sign off. In the course of the board’s review, Great River signed agreements with Island Corp. in Bellows Falls and the state Department of Public Service, which serves as the public’s advocate in energy matters.
The Island Corp. deal preserves a longtime power allocation agreement whereby the company, which owns a former paper mill complex, is entitled to receive up to 300 kilowatts of free electricity from the Bellows Falls hydro station’s owner at any given time.
The Public Service Board, in approving the Great River-TransCanada deal last week, cited both of those agreements as well as several other aspects of the sale:
• ArcLight has experience owning and operating hydroelectric facilities in Maine, and the company “has invested more than $3.1 billion in renewable power facilities.”
• Great River will continue to operate as a wholesale generator, selling electricity in the New England regional market.
• The buyer “will seek to retain all existing management and operational personnel” employed by TransCanada. Great River also will be subject to a recently negotiated union contract.
• Great River will adhere to tax obligations in 26 Vermont municipalities along the Connecticut and Deerfield rivers. TransCanada paid about $8.2 million in property taxes in 2016, state documents say.
• TransCanada has undertaken renewal of federal licenses for the Wilder, Bellows Falls and Vernon hydro stations, which expire in 2019. Great River has pledged to continue the relicensing process.
The state also has signed off on Great River continuing to operate under a “de minimis” model of financial regulation, as TransCanada has been. That exempts the company from making certain financial filings with the state.
In this case, that applies to ArcLight’s intention to allow other, unnamed entities to acquire “non-managing” interests in Great River Hydro. Because ArcLight is promising to remain fully in control of the hydro company, the company won’t have to seek Public Service Board approval for those transactions.
On Monday, a Great River spokesman said the acquisition of the TransCanada dams had not yet closed. The company is expected to comment further when the deal is complete.
