ALCOA closes dam sale: Tapoco now Brookfield Smoky Mountain Hydropower
By Robert Norris | (firstname.lastname@example.org)
Tapoco-APGI, ALCOA’s hydroelectric project built to power Tennessee Operations, is now Brookfield Smoky Mountain Hydropower.
The sale of the 378-megawatt project that includes four dams on the Little Tennessee and Cheoah Rivers in East Tennessee and Western North Carolina was completed Thursday, the companies announced.
The price tag: $600 million.
Along with Calderwood and Chilhowee Dams in Blount and Monroe counties and Santeetlah and Cheoah Dams in Graham County, N.C., the transaction included the four generating stations, 86 miles of transmission line and about 14,500 acres of land associated with and surrounding Tapoco.
Electricity production by the Tapoco project — originally called the Tallassee Power Company — provided energy to ALCOA for nearly a century. The four dams came into service between 1919 and 1957, with Cheoah the first built and Calderwood the last.
The buyer, Canada-based Brookfield Renewable Energy Partners, is one of the largest publicly traded, pure-play, renewable power platforms globally. Its portfolio is primarily hydroelectric and totals about 5,000 megawatts of installed capacity.
Diversified across 69 river systems and 11 power markets in the United States, Canada and Brazil, Brookfield generates enough electricity from renewable resources to power 2 million homes on average each year. The company’s U.S. operations are headquartered in Marlborough, Mass.
When the planned sale was announced in June, Brookfield Director of Corporate Communications Julie Smith-Galvin said, “Brookfield does not plan to make any changes to the land holdings or land use at this time. We recognize the importance of watersheds and have a strong record of working with stakeholders within them.”
Tapoco — operated by ALCOA Power Generating Inc., a wholly owned subsidiary of ALCOA Inc. — employed 35 people, 26 hourly and nine salaried employees when the plans were originally announced,
Smith-Galvin said Brookfield expected to retain most of those employees.
Tapoco was originally developed by ALCOA Inc. to provide power for its aluminum smelting and rolling mill operations in Alcoa. The need for that power was substantially reduced when the potlines at the Tennessee Operations South Plant were closed in March 2009 after ALCOA and the Tennessee Valley Authority were unable to agree to a long-term power contract.
Brookfield Renewable owns about 25 percent interest in Brookfield Smoky Mountain Hydropower and will manage and integrate the assets into its North American operating platform. The remaining equity interest will be funded by an institutional fund manager by Brookfield Asset Management.
The Tapoco portfolio is in the latter stages of an extensive asset modernization program which is expected to increase its average annual generation of about 1.4 million megawatt hours, according to Brookfield.
In August 2010, ALCOA kicked off a $110 million modernization project at Cheoah Dam to increase the dam’s efficiency and energy output and increase its life by another 40 to 50 years.
J.P. Morgan advised ALCOA on the transaction.