ArcLight Generates Power –

ArcLight Capital Partners LLC, a private equity firm focused on the electric power and energy sector, has purchased Big Spring Inc., an electric power generating facility located in Big Spring, Texas.

ArcLight is being tight-lipped regarding financial details, “due to the sensitivity of the bondholders,” said Robb Turner, a senior partner with ArcLight.

According to Turner, “This is a 100% equity deal,” with the cash coming from the $950 million ArcLight Capital Partners LLC, the firm’s inaugural fund. The fund is approximately 50% deployed.

ArcLight’s partner in the transaction, Caithness Energy LLC, will operate the plant. Caithness is a privately owned company specializing in power-project development and geothermal resource exploration.

The deal began when the facility was purchased from the bondholders of York Power Funding, who took control of the plant as a result of the bankruptcy of the York Research Corporation.

Lehman Brothers represented the bondholders during the bankruptcy filing.

According to Turner, York tried unsuccessfully to package the entire corporation in one sale, but, unable to complete a deal, acquiesced and agreed to sell off individual units. “It took us 18 months to come to terms and close this deal, but it was a deal worth waiting for,” Turner said.

Big Spring began commercial operations in 1999 and sells 100% of its output to Texas Utilities.

ArcLight is also a partner in WHP Acquisition LLP, a joint venture with Aquila Inc. The venture was developed to acquire Western Hub Properties and its underlying Lodi Gas Storage Facility from JPMorgan Partners and Haddington Partners for $220 million, a deal that is still pending.