Yield-Hungry Institutions Back Merchant Power Plant Revival

February 2011 was bitterly cold in Texas. Increased power demand for heating overburdened the grid, forcing rolling blackouts. Some 7,000 megawatts had to be switched off, leaving hundreds of thousands of people in cities like Dallas and Houston without electricity for 45-minute spells.

Spot power prices — what utilities pay when their own supply is cut — surged 60-fold, from a typical $50 per megawatt hour to about $3,000 on February 2, 2011. Having shut down several overworked or damaged facilities, grid operators even imported power from Mexico. The chance to sell energy to the Texas grid helped spark the rebirth of U.S. merchant power plants after a few years of dormancy following the global financial crisis; the first new facility was financed in July 2012. If states are energy hungry, institutional investors now appear equally ravenous for merchant plays’ generous yields.

Developers build merchant power plants without contracts with utilities. At the vanguard of the revival is Dallas-basedPanda Power Funds，这是在德克萨斯州建造三种燃气植物，并为马里兰州，宾夕法尼亚州和弗吉尼亚州计划更多地计划。“这个市场与之前的任何东西完全不同，”熊达高级合作伙伴和托德卡特总统表示，指出电力需求升高和廉价页岩天然气一直是比赛换句话。“这些项目只是冰山一角到所需的投资。”

Panda was launched in 2010 by the former senior management team of Dallas-based independent power developer Panda Energy International. The firm aimed to be the first mover in markets with little surplus power when usage spikes, during heat waves or cold snaps, for example. With natural-gas prices expected to stay low and up to 60 gigawatts of U.S. coal-fired power generation slated for retirement to meet environmental standards, other players, such as Chicago-based Invenergy and Silver Spring, Maryland–based Competitive Power Ventures Holdings, are joining the merchant fray.

Since financing the 758-megawatt, natural-gas-fired Temple I plant in Temple, Texas, in July of last year, Panda has raised about $3 billion in equity and debt from institutional investors. The firm’s strategy is simple. First, it uses equity from the funds it raises. Panda backed the three Texas projects with money from its maiden $420 million Panda Power Generation Infrastructure Fund, whose investors included the State Teachers Retirement System of Ohio, the Indiana Public Employees’ Retirement Fund, the 3M Employee Retirement Income Plan, Dutch pension fund APG, the Alfred I. duPont Testamentary Trust and a large U.K. public pension fund.

Panda then taps the B-loan market to raise debt-backing facilities, with many of its equity investors chipping in. The Ohio teachers’ system provided $50 million in debt for the 829-megawatt Moxie Energy “Liberty” plant in Pennsylvania, which Panda financed in August . “Panda has benefited from its access to equity capital and an aggressive management team,” says Carl Peterson, head of debt origination at GE Energy Financial Services in Stamford, Connecticut. “The B-loan market for financing is also significantly more expansive now,” Peterson adds, citing institutions’ willingness to educate themselves about merchant power and make credit committees comfortable with the risk of not having a guaranteed buyer.

熊猫基金投资的内部回报率可以是25％至30％，罗伯克·约翰斯顿（Becon Hill Financial）的波士顿首席执行官，该公司的第一辆车的展示率代理商，现在正在作品中的第二个。作为机亚博赞助欧冠构投资者以低利率环境捕获收益率，它们是开放的，以承担更多的风险，并从商业房地产转向能源部门，约翰斯顿票据。

But institutions now also have more buckets into which an investment like Panda might fall, whether they regard it as a high-return, infrastructure or opportunistic play, he adds: “Institutional investors are taking a more sectored approach to the private equity markets.”

熊猫有其出牙问题的份额。当它在去年关闭了寺庙的债务筹资时，在机构金属的定价很高，在Libor加上1000个基点，因为投资者加热到新的资产课程。只有八所机构为该交易提供了债务。但是，当熊猫融资寺二世4月份时，70多人想要供应债务，并坚定的自由主义的价格加650个基点。

By the end of the year, Panda plans to close a second fund worth between $800 million and $1 billion. All of the investors from the first fund have lined up for a piece of it, and the firm already has about $600 million in commitments. The merchant power renaissance looks to be gathering steam. • •

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