Pattern Energy Group Inc. has acquired from Pattern Energy Group LP (Pattern Development) interests in the two wind projects that comprise the 324 MW Broadview facilities and associated Western Interconnect transmission line.
Broadview, which is located 30 miles north of Clovis, N.M., commenced commercial operations in late March. Broadview interconnects to Western Interconnect, an independent, 345 kV transmission line approximately 35 miles in length. To wheel the output from Broadview to the California Independent System Operator system, where it is delivered to Southern California Edison, Broadview has entered into long-term, firm, point-to-point transmission service agreements to move the output through the Western Interconnect, Public Service of New Mexico and Arizona Public Service transmission systems.
Pattern Energy acquired an 84% initial cash flow interest in Broadview and a 99% ownership interest in Western Interconnect. Institutional equity investors have acquired from Pattern Development a 16% initial cash flow interest in and a 99% initial taxable income allocation from Broadview. Following the acquisition, based on its initial cash flow share, Pattern Energy retains an owned interest of 272 MW in Broadview.
Pattern Energy acquired the interests for $269 million, including cash consideration of $215 million and an assumed project loan of $54 million secured by Western Interconnect. The cash consideration was funded from available corporate liquidity. The Western Interconnect loan commitment was originally secured at the time of the agreement to acquire Broadview in June 2016. The interest on the debt is 90% swapped over the 19-year amortization term, and the debt has a maturity of 10 years. Broadview will begin receiving both pay-as-you-go contributions from the project’s tax equity investors and certain New Mexico production tax credits starting in 2018.
Broadview consists of 141 Siemens 2.3 MW wind turbines and has the capacity to generate 324 MW of energy, the power equivalent to the annual energy usage of approximately 180,000 California homes. However, Broadview is limited to 297 MW of injection capacity at the transmission interconnection point.
Pattern Energy expects Broadview and Western Interconnect to generate cash available for distribution (CAFD) of approximately $18 million in 2018 – increasing each year by approximately $2.5 million and generating an average of $23 million per year in CAFD over the five-year period starting in 2018.
“This extraordinary project brings inexpensive renewable power from eastern New Mexico, one of the highest wind areas in the west, using dedicated transmission capacity from several transmission systems into California,” comments Mike Garland, president and CEO of Pattern Energy.