Algonquin Power Fund, Emera to buy California utility

CALIFORNIA - Algonquin Power Income Fund and Emera Inc. agreed to buy the California electric utility of NevadaÂ’s NV Energy Inc. for $116 million in cash to gain a foothold for developing renewable power generation in the state.

A 50-50 joint venture, Calpeco, will acquire a 12-megawatt generator and power lines that supply 47,000 homes and businesses, Oakville, Ontario-based Algonquin said in a statement. The deal is expected to close in 2010, subject to state and federal approvals. Emera is based in Halifax, Nova Scotia.

California has set the most ambitious goals in the U.S. to cut heat-trapping emissions from power plants and to add electricity generated from renewable energy such as wind and solar. Algonquin owns 53 power plants in the U.S. and Canada, mostly driven by water, wood waste or landfill gas.

Separately, Emera, owner of electric utilities in Nova Scotia and Maine, said it will acquire 9.9 percent of Algonquin when the California deal closes, with an option to buy another 5 percent stake.

Algonquin rose 13 percent, or 33 cents, to $2.83 on Toronto Stock Exchange. Emera gained 30 cents to $20.11. Las Vegas-based NV Energy fell 3 cents to $9.65 in New York Stock Exchange composite trading.

The California utility may expand as it serves a growing area near Lake Tahoe, the buyers said. All current employees will be offered jobs, they said.

NV Energy changed its name from Sierra Pacific Resources Inc. in September, saying it would concentrate on power generation and supply in Nevada.