Avenue Capital Sells 11 Gas Plants in California in $2.2 Billion Deal
(P&GJ) — Avenue Capital Group has agreed to sell a portfolio of energy transition-focused assets, including 11 natural gas-fired power plants, to Partners Group in a $2.2 billion deal. The assets are part of the Avenue Golden Continuation Fund and are operated by Middle River Power.
Middle River, founded by Avenue in 2016 to manage power sector investments, has developed a strategy integrating battery energy storage systems (BESS) with its gas plants to create Hybrid Energy Centers. These systems store surplus renewable energy and discharge it when needed, reducing the plants' carbon footprint while improving reliability. The approach has secured long-term contracts of up to 15 years with utilities.
Craig Hart, Senior Portfolio Manager of Avenue Golden Fund, highlighted the shift toward a contracted energy transition business:
"We have repositioned the business from a collection of largely merchant thermal assets to a highly contracted energy transition business that is poised for future growth."
Marc Lasry, CEO of Avenue Capital, emphasized the continued role of natural gas in California’s energy transition:
"Our thesis then was the same as it is now: that properly positioned, well-maintained natural gas-fired power plants would remain grid-critical throughout the energy transition."
Middle River, included in the sale, also manages 4.8 gigawatts of power plant capacity outside of California.
Guggenheim Securities and Morgan Stanley & Co. advised Avenue on the deal, with legal counsel from Latham & Watkins.
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