Jera Expands US Power Portfolio

Japan’s leading LNG buyer Jera said August 10 that it has signed an agreement with US private equity firm Starwood Energy Group to acquire a 50% share in three US natural gas-fired power plants.

The three plants, all in the northeastern US and referred to as the Compass portfolio, are the 840 MW Marcus Hook Energy Center, in suburban Philadelphia, and the 173 MW Dighton and 160 MW Milford plants in Massachusetts. After buying its 50% stake, Jera Americas will participate in the operation of the Compass Portfolio; Starwood Energy would retain the other 50%.

Jera also said that it also acquired a 50% equity in Linden cogeneration facility, a 972 MW natural gas-fired power plant in northern New Jersey April 2018. Once the Compass transaction closes, Jera’s net ownership of power generation in North America will be some 3,536 MW totally, "all in excellent locations close to customer demand,” according to Jera Americas CEO Toshiro Kudama.

Jera is a 50-50% LNG joint venture of Tokyo Electric and Chubu Electric set up in 2015.

Starwood Energy CEO Himanshu Saxena added: “Jera’s worldwide expertise will provide significant value as we continue to operate and expand the facilities.” 

This is not the first investment by Japanese in the sector in the sector: early 2017 Jera agreed to buy a 44% interest in a 1,100 MW gas-fired power project due onstream 2020 in New York state.  Four different Japanese firms bought into a 620 MW Connecticut plant in May 2018 in which Tokyo Gas already held a stake, while three others bought into a 488 MW one in Pennsylvania in April 2017.

Of the Compass assets, Marcus Hook power and capacity is sold mainly into the PJM wholesale electricity market, while that from the other two plants is sold into the ISO New England (ISO-NE). Marcus Hook also has a contract for capacity with the Long Island Power Authority.