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Investment venture buys Dover natural gas plant

Jacob Owens June 24, 2020

DOVER – A partnership of an out-of-state equity investor and energy operator has acquired the natural gas-fired power plant that also powers Kraft Heinz’s food products plant and Proctor & […]

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A group of energy sector investors acquired Energy Center Dover from Clearway Energy in March. | PHOTO COURTESY OF GOOGLE[/caption] DOVER – A partnership of an out-of-state equity investor and energy operator has acquired the natural gas-fired power plant that also powers Kraft Heinz’s food products plant and Proctor & Gamble’s wipes manufacturing facility. The partners, New Jersey-based operator DCO Energy and New York-based investor Basalt Infrastructure Partners, bought the plant located at 1280 W. North St. from Clearway Energy Group, which was born out of the $1.3 billion 2018 sale of former NRG Energy assets. Terms of the deal, which was signed in September, approved by federal energy regulators Feb. 28 and closed March 3, were not disclosed. According to Kent County property records, the property continues to be owned by First State Power Management Inc., which purchased the land for the plant from Kraft Foods for an estimated $6.7 million in 1995. With no change in the ownership of the property, it appears that Clearway sold the limited liability company that holds the land to DB Energy Assets, the investors’ joint venture. A March 31 filing with the U.S. Securities and Exchange Commission said that Clearway sold “100% of its interests in Energy Center Dover LLC and Energy Center Smyrna LLC.” A Clearway spokesperson declined to elaborate on the details of the sale and DCO Energy officials, who announced the acquisition May 29, have not returned several calls for comment. The plant, known as Energy Center Dover, is a cogeneration plant, which consist of a gas turbine generator exhausting into a heat recovery steam generator. The technology is more environmentally friendly by reusing the hot exhaust that older plants would have been emitted into the air to boil water and power a second steam generator. Raw heat, or thermal energy, is also captured and used by the neighboring manufacturing plants. According to SEC filings, Kraft and Procter & Gamble buy 66 megawatts thermal equivalents of thermal energy from the plant, with each holding three-year power purchase contracts. The plant's electricity is sold into the PJM Interconnection, the electric grid used by mid-Atlantic states. The sale to DB Energy Assets will not impact energy prices. Energy Center Dover was a highly touted project by former Gov. Jack Markell, as then-owner NRG Energy invested $25 million to convert the plant from a coal-fired plant to a completely gas-fed one. The 2013 conversion of the 36-year-old, 103-megawatt plant resulted in reductions of 99% of sulfur dioxide and 92% of nitrogen oxide emissions – two air pollutants that can cause serious respiratory conditions – and more than 65% of the stack particulate emissions. The acquisition of the Dover plant is the second Delaware purchase for DCO Energy after it bought a district thermal energy plant that serves 800 King St. and the New Castle County Courthouse and Justice Complex in downtown Wilmington from Pepco in 2017. “We are very excited to operate this important cogeneration and power facility in Dover,” said Gary Fromer, CEO of DCO Energy, in a statement announcing the latest deal. “As a longtime South Jersey-based organization, Delaware is literally in our backyard. Along with our Wilmington, Del., city district energy facility, we are thrilled to expand our role as part of the Delaware business community and to continue to deliver efficient, reliable power and thermal energy to our customers in Delaware.” DCO Energy is an independent energy development company specializing in central energy centers, renewable energy projects and combined heat, chilling, and power (CHCP) production facilities across North America and the Caribbean. Founded in 2000, it has developed and operated a portfolio of more than 500 megawatts of electric power, 110,000 tons of chilled water, and more than 4 million pounds per hour of installed boiler capacity. By Jacob Owens jowens@delawarebusinesstimes.com

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