Private equity funds affiliated with Blackstone Energy Transition Partners have signed a definitive agreement to acquire the Hill Top Energy Center, a 620MW natural gas power plant in Western Pennsylvania, from private investment company Ardian for nearly USD 1 billion. The acquisition comes as electricity consumption rises in the region, driven by growing power needs linked to data center development and other use cases in the Pennsylvania-New Jersey-Maryland electric market.

Facility Details and Efficiency Claims

The Hill Top Energy Center, completed in 2021 and located in Greene County, is claimed to be one of the most efficient combined cycle gas turbine plants in the United States. The facility will continue to meet growing power needs linked to data center development and other use cases in the Pennsylvania-New Jersey-Maryland electric market following the acquisition.

Strategic Investment Context

This acquisition aligns with Blackstone's announcement in July to invest over USD 25 billion in Pennsylvania's digital and energy infrastructure. The investment aims to bolster AI and stimulate an additional USD 60 billion in funding into the Commonwealth, according to Blackstone. Blackstone Energy Transition Partners senior managing director Bilal Khan and managing director Mark Zhu jointly stated:

“The electricity infrastructure required to power the AI revolution requires a tremendous amount of capital. We are proud to make our latest investment in this sector, which is among our highest conviction investment themes, in Western Pennsylvania. Hill Top is among the best-in-class and a highly efficient modern power generation facility that is exceptionally well-positioned to help Pennsylvania and the region serve as a key center of AI innovation.”

Market Drivers and Industry Trends

After years of flat growth in US grid demand, electricity consumption is rising due to industrial onshoring, widespread electrification, and the proliferation of AI data centers. These data centers are the leading drivers of demand growth, creating new opportunities for investors in natural gas-fired generation, according to the company.

Transaction Details and Previous Acquisitions

Santander and Houlihan Lokey served as financial advisors to Blackstone Energy Transition Partners, while Kirkland & Ellis provided legal advice for this transaction. According to a Reuters report, Blackstone Energy Transition Partners earlier this year agreed to acquire the 774MW Potomac Energy Center in Loudoun County, Virginia. The Potomac Energy Center is a natural gas-fired power plant built in 2017 and is located in northern Virginia, close to Washington, D.C.

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