NRG eyes Edison assets for Yield

NRG Energy says it may sell 1.1GW of wind capacity among generation assets that it seeking to buy from bankrupt developer Edison Mission Energy to subsidiary NRG Yield.

NRG Energy sees that long-term contracted wind capacity as “highly consistent with the NRG Yield asset profile, in quality, counter-party credit and average contract duration”, chief financial officer Kirk Andrews told analysts on a conference call this week.

Edison Mission owns 30 wind projects in 11 states totaling about 1.73GW, ranking eighth on 1 January in market share in the US, according to the American Wind Energy Association. 

Andrews did not say which wind farms comprise the assets that could “drop-down” to NRG Yield.

NRG Energy executives say the $2.635bn Edison Mission transaction is expected to close in first quarter 2014.

NRG Energy created NRG Yield earlier this year with 1.324GW of its generating assets. It now owns 1.447GW, of which 414MW are renewables assets -- including full ownership of five utility-scale solar farms, and 48.95% of the California Valley Solar Ranch and 49.95% of the Avenal solar farm.

Other assets include one wind farm in Texas; distributed solar systems in Arizona and 51% of others in California, and conventional and thermal generation facilities in five states.

NRG Yield raised $468m from an initial public offering of common stock in July. NRG Yield promotes itself as being attractive for investors seeking stable and growing dividend income from a diversified portfolio of lower-risk high-quality assets.

NRG Energy retains a majority voting interest in the subsidiary and also majority ownership of its assets.

NextEra Energy is considering a similar “yield company-type” vehicle for some of its renewable energy assets, although company officials say further study is needed before a decision is taken. NextEra is the largest wind and solar generator and developer in the US.