NextEra Energy Partners LP entered into an agreement with a subsidiary of its sponsor, NextEra Energy Resources LLC, to acquire the Seiling I & II Wind Energy Centers, a wind generation site in Oklahoma. NextEra Energy will pay approximately $323 million for the site, plus the assumption of about $200 million in tax equity financing.
JUNO BEACH, Fla., Feb. 22, 2016 /PRNewswire/ — NextEra Energy Partners, LP (NYSE: NEP) today announced that it has entered into an agreement with a subsidiary of its sponsor, NextEra Energy Resources, LLC, to acquire the Seiling I & II Wind Energy Centers, a combined 299.2-megawatt (MW) wind generation site in Dewey and Woodward counties, Okla. When completed, the acquisition of these assets will expand NextEra Energy Partners’ portfolio of contracted renewable energy projects to approximately 2,509 MW.
“We are pleased to announce the acquisition of these two high-quality wind energy centers, both of which are fully contracted with long-term power purchase contracts in place with strong creditworthy counterparties,” said Jim Robo, chairman and chief executive officer. “This acquisition represents yet another example of the strength of the pipeline of organic growth opportunities that our sponsor, NextEra Energy Resources, provides and positions us to advance our growth strategy and deliver unitholder distributions consistent with the expectations we’ve outlined.”
NextEra Energy Partners expects to complete the acquisition in the first quarter of 2016 for a total consideration of approximately $323 million, plus the assumption of approximately $200 million in tax equity financing. The purchase price is subject to working capital adjustments. The partnership expects to fund the transaction, in part, through the net proceeds of an issuance of common units, with the balance of the purchase price expected to be funded through a draw under a subsidiary of NextEra Energy Partners’ revolving credit facility.
NextEra Energy Partners expects the acquisition to contribute adjusted EBITDA of approximately $73 million to $83 million and CAFD of approximately $30 million to $35 million, each on an annual run rate basis as of Dec. 31, 2016. The acquisition is expected to contribute to a 3.7 percent increase in the first-quarter distribution to an annualized rate of $1.275 per common unit and support NextEra Energy Partners’ current expectations of 12 to 15 percent per year growth in limited partner distributions through 2020 off a $1.23annualized rate baseline.
NextEra Energy Partners, LP
NextEra Energy Partners, LP (NYSE: NEP) is a growth-oriented limited partnership formed by NextEra Energy, Inc. (NYSE: NEE) to acquire, manage and own contracted clean energy projects with stable, long-term cash flows. Headquartered in Juno Beach, Fla., NextEra Energy Partners owns interests in wind and solar projects in North America, as well as natural gas infrastructure assets in Texas. The renewable energy projects are fully contracted, use industry-leading technology and are located in regions that are favorable for generating energy from the wind and sun. The seven natural gas pipelines in the portfolio are all strategically located, serving power producers and municipalities in South Texas, processing plants and producers in the Eagle Ford Shale, and commercial and industrial customers in the Houston area. The NET Mexico Pipeline, the largest pipeline in the portfolio, provides a critical source of natural gas transportation for low-cost, U.S.-sourced shale gas to Mexico. For more information about NextEra Energy Partners, please visit: www.NextEraEnergyPartners.com.
NextEra Energy Partners, LP Adjusted EBITDA and CAFD Expectations for the acquisition of the Seiling I & II Wind Energy Centers
This news release refers to adjusted EBITDA and CAFD expectations for the acquisition of the Seiling I & II Wind Energy Centers. NEP’s adjusted EBITDA expectations for this acquisition represent projected revenue less fuel expense, project operating expenses, corporate general and administrative expenses, plus other income and deductions, including incentive distribution rights fees. Projected revenue as used in the calculations of projected EBITDA represents the sum of projected operating revenue plus the earnings impact from the amortization of convertible investment tax credits plus the reimbursement for lost revenue received pursuant to a contract with NextEra Energy Resources.
CAFD is defined as cash available for distribution and represents adjusted EBITDA less (1) a pre-tax allocation of production tax credits, less (2) a pre-tax allocation of the earnings impact from convertible investment tax credits, less (3) debt service, less (4) maintenance capital, less (5) income tax payments, less (6) other non-cash items included in adjusted EBITDA if any. CAFD excludes changes in working capital.