BBIP invests in Texas microgrid power

Texas Microgrid, a new partnership between Balfour Beatty Infrastructure Partners and microgrid operator ERock, marks BBIP’s second investment in North America.

Balfour Beatty Infrastructure Partners, the funds management business of UK-listed developer Balfour Beatty, has partnered with Enchanted Rock (ERock), a Houston-based microgrid developer and operator, to form Texas Microgrid.

BBIP will be providing the equity for the new entity, including financing the construction of the microgrid power assets that will provide back-up power to commercial and industrial customers using natural gas. 

The firm did not disclose the amount of equity invested in Texas Microgrid, but BBIP partner Jeff Neil confirmed the investment was being made through BBIP's debut fund, which closed on $618 million in July 2014.

ERock will be responsible for origination; engineering, procurement and construction management; as well as operating the assets once they are online.

“We are excited about partnering with ERock, a company that has in-depth knowledge of the Texas market,” BBIP's Neil told Infrastructure Investor on Tuesday. “We are excited about expanding and supporting Texas Microgrid beyond the current 50MW,” he added, referring to the contracts the company has already signed with customers for more than 50MW of power.

“The contracts we’re signing involve providing reliability service to customers in times of a power outage and delivering value to them during those periods,” ERock's chief financial officer Ian Blakely said.

“Texas Microgrid will also have the ability to sell services and power into the ERCOT market as well, at times of stress on the power grid and when it makes economic sense relative to our operating costs,” Blakely added. The contracts the company has signed so far have an average term of 15 years and involve between 40 and 50 locations in the greater Houston and Dallas/Ft. Worth areas.

Texas Microgrid is BBIP’s second investment in North American infrastructure. The first is Upper Peninsula Power Company, a regulated electric utility business that provides distribution and power supply services to about 52,000 customers in the Upper Peninsula of Michigan. BBIP acquired the utility in January 2014 from New York-listed Integrys Energy Group.

Other assets in BBIP’s portfolio include McEwan Power, a portfolio of 10 UK-based solar parks; Wightlink, a ferry operator to the Isle of Wight; and UK power generator Alkane Energy.

The firm was established in 2011 as a partnership between a team of infrastructure investment professionals and UK developer Balfour Beatty. BBIP focuses on the North American and European mid-market infrastructure sectors of utility, energy and transportation. It targets low volatility assets that are either in the operational or late-stage construction phase, according to its website.