The aggregate value of individual asset deals in the U.S. power sector in the third quarter jumped to $1.98 billion, the highest level since the second quarter of 2019, and far surpassing this year's second quarter aggregate value of $2.2 million, according to S&P Global Market Intelligence data.
One transaction comprised the bulk of the quarter's aggregate value.
The number of individual asset acquisitions in the third quarter of 2021 ticked down slightly, to nine, compared to 12 in the previous quarter. The third quarter 2021 number of transactions is also slightly higher than the seven individual asset acquisitions in the third quarter last year.
The third-quarter aggregate value results of individual asset deals climbed 567.7% compared to the third quarter of 2020.
Furthermore, the combined aggregated individual asset deal values for the first three quarters of 2021 jumped 78.7% from the combined values of the first three quarters of last year.
Market Intelligence calculates aggregate transaction value by looking at the amount paid for equity and in cash plus the value of assumed current liabilities, net of current assets.
The number of company-level mergers and acquisitions in the U.S. electric, multi-utility, and independent power producer sector deals announced in the third quarter of 2021 climbed to five, from two in the previous quarter, and slightly lower than the seven deals in the third quarter of 2020.
There were five corporate acquisitions and nine M&A asset deals announced or completed in the third quarter. Transaction value details are not available for all of the deals.
The largest asset deal announced in the third quarter by transaction value was the acquisition by ArcLight Capital Partners LLC of Public Service Enterprise Group Inc.'s 13 fossil fuel generating units totaling a capacity of 6,750 MW. The deal has an announced transaction value of $1.92 billion and an expected completion date between Dec. 1, 2021, and March 31, 2022. The transaction is aligned with PSEG's strategic alternatives, which involve exiting the fossil fuel generation business and transitioning to zero-carbon generation. Goldman Sachs & Co. LLC acted as the financial adviser for the deal.
Basin Electric Power Cooperative is expected to pay about $20 million for a 30% stake in the planned 625-MW natural-gas-fired Nemadji Trail Energy Center located in Douglas County, Wis., from ALLETE Inc. subsidiary South Shore Energy LLC. The ALLETE unit will retain a 20% ownership interest, and Dairyland Power Cooperative will own a 50% stake.
Two transactions during the quarter involved retail energy providers.
NRG Retail LLC, a unit of NRG Energy Inc., acquired a portion of retail provider Liberty Power Corp.'s residential customer equivalents for $36.4 million. The transaction included Liberty Power's residential customer book in Texas, a separate book of residential customers outside of Texas and a book of commercial customers outside of Texas. NRG assigned these customers to different retail suppliers.
Shell New Energies US LLC, a subsidiary of Royal Dutch Shell PLC, acquired a 100% common equity share acquisition of retail electricity supplier Inspire Energy Holdings LLC. Shell New Energies has been supplying Inspire Energy since 2017, it said in announcing the deal, which was completed Sept. 15 and expands Shell's residential energy supply business in the United States.
