Whippany-based MetLife Investment Management announced April 13 that it was the sole lender for approximately $200 million in financing to support the decommissioning of the last two coal-fired plants in the state.
Last month, the New Jersey Board of Public Utilities approved a petition filed by Atlantic City Electric Co. that modifies power purchase and sales agreements between ACE and Chambers Cogeneration Ltd. and Logan Generating Co., leading to the end of coal-fired generation in the state.
The MIM financing will allow Starwood Energy Group, the majority owner of the two plants, and ACE to move forward with proposals to retire the ongoing agreements between ACE and the coal-fired plants. Both plants are expected to cease generating coal energy at the end of May 2022, nearly 30 months ahead of schedule, according to MIM.
MIM’s Private Capital team led the structuring and financing on behalf of institutional clients and MetLife’s general account. The financing will be used to pay for decommissioning costs, including payments to suppliers and operators, and repayment of existing outstanding debt.
According to the announcement, the agreement by both plants to cease producing coal-fired electricity will lead to redevelopment and transition to other forms of electric generation.
The decommissioning is expected to result in the reduction of approximately 4.3 tons (or 3.9 million tonnes) of carbon dioxide in the atmosphere—the equivalent of eliminating over 750,000 passenger cars a year, and an estimated $30 million in savings to ACE customers. The transaction also supports the state’s Energy Master Plan, which aims to reduce 80% carbon emissions levels and reach 100% clean energy generation by 2050.
“We’re committed to continuing to support the energy transition through our investments, which we customize to the needs of our borrowers while also targeting positive community outcomes,” Nancy Mueller Handal, head of private fixed income & alternatives at MIM, said in a statement. “We’re proud to be a partner in a project that will lead to cleaner energy production by transitioning the last two coal plants in New Jersey, which reinforces our global decarbonization efforts as we collectively strive for a greener future.”
Himanshu Saxena, CEO of Starwood Energy, added, “We are grateful to MetLife Investment Management for working with us on this very important transaction as we help move New Jersey to a cleaner future and retire the last two coal plants in New Jersey.”
According to the announcement, MIM manages $4.5 billion in approximately 150 investments in energy transition renewable energy technologies, including solar and wind power generation, hydroelectric power, geothermal energy, biomass and battery.
