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Valley Electric Association Inc. and GridLiance Holdco, L.P., which is backed by Blackstone Energy Partners, an affiliate of Blackstone, said VEA board of directors has approved the sale of VEA’s 230 kV high voltage transmission System to GridLiance.
The planned sale now moves to a vote of approval by the VEA members. VEA owns the facilities through its unit Valley Electric Transmission Association. GridLiance plans to acquire the assets through a new transmission company it will form to operate in the Western Interconnection.
“This is a great moment for Valley Electric member-owners,” said Thomas H. Husted, CEO for VEA. “With approval from our members, we will be entering into a partnership with one of the country’s foremost transmission companies. That’s the way GridLiance looks at it, too: forming a relationship with our cooperative as they enter the Western markets. There are no downsides to this partnership.”
VEA joined the California Independent System Operator Corporation in 2013, placing the HVTS in the California market and under California ISO‘s regional tariff. In addition to optimizing the 230 kV transmission system economically, joining California ISO created enhanced opportunities for renewable generation in VEA’s service territory.
In May of 2016, VEA issued a request for proposals to sell the HVTS, comprising approximately 160 miles of 230 kV transmission lines and related substation equipment. Multiple companies submitted formal bids, and two finalists were further evaluated by the VEA Board before they selected GridLiance as the successful bidder.
GridLiance will pay net book value for the assets, assume outstanding debt, and provide additional value that brings the total consideration to over $200 million. VEA and GridLiance are currently working together on an exclusive basis to finalize the definitive agreements, which are expected to be signed within the next few weeks.
Under the agreement, GridLiance will use VEA long-term to operate, maintain and manage the system – preserving local jobs and ensuring that the relationships and experience VEA staff have developed will continue to benefit the high voltage transmission system. The acquisition will not affect the remaining transmission distribution facilities owned by VEA.