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ArcLight exits Michigan Power

The energy-focused buyout firm is set to sell the 125MW power plant to Rockland Capital Partners two months after closing its sixth flagship fund on $5.75bn.

Boston-based ArcLight Capital Partners has agreed to sell Michigan Power LP, owner of a 125 megawatt (MW) natural gas-fired power plant in Ludington, to a subsidiary of Rockland Capital.

ArcLight has owned the limited partnership – through ArcLight Energy Partners Funds II and V, since 2008 when it acquired an initial 30.4 interest. In September 2012, it acquired the remaining 69.6 percent indirect partnership interest from Olympus Power and John Hancock Life Insurance.

According to a statement, Michigan Power is fully contracted and sells its entire output to Consumer Energy, Michigan’s largest electric utility, under long-term power purchase agreements. The plant also supplies steam and compressed air to Occidental Chemical.

Rockland Capital, a private equity firm based in Houston, is acquiring the asset through Wolverine Power Holdings, a subsidiary of Rockland Power Partners II. In May 2014, it acquired ArcLight’s 50 percent stake in Sabine Cogen, a 105MW cogeneration facility in Orange, Texas, through Bayou Power, another affiliate.

News of the current sale, which is expected to close by year end, comes two months after ArcLight finished raising $5.75 billion for ArcLight Energy Partners VI, its sixth flagship fund.

Since its inception, ArcLight has invested over $12.7 billion in more than 90 power, midstream and production assets. In addition to its Boston headquarters, the firm also has an office in Luxembourg.