The Middletown power plant involved in Sunday’s fatal explosion is majority owned by a private equity firm, which raised the cash for its construction. WNPR’s Harriet Jones reports on the history of the project.
Kleen Energy Systems began as locally controlled firm in 2001, which first proposed a high efficiency gas powered plant next to the Connecticut River in Middletown. Its principals, trash magnate Phil Armetta who owned the land, and former Middletown councilor William Corvo shepherded the project through the lengthy approvals process, and got the construction off the ground under the supervision of Torrington based O&G Industries, still the general contractor on the project. But this was a deal that required a billion dollars worth of financing – and that’s where Energy Investors Funds stepped in in 2008. Shasha Dai, a reporter for Dow Jones Private Equity Analyst says the firm raised the capital, but is probably not closely involved in day to day management.
"Usually they would hire a professional team to run the business, or they would just keep the original management in place. In the Middletown case we should remember that the project was still under construction, it was still in the hands of the developer, so Energy Investors Funds has yet to assume control of the project."
Original landowner and silent partner Armetta has since stepped out of the picture, tainted by federal charges of racketeering, but Corvo remains a minority stakeholder in the plant, and the President of Kleen Energy Systems. He wouldn’t comment today on the way forward for the project, but Middletown mayor Sebastian Giuliano told WNPR’s Colin McEnroe he still believes the plant will be completed.
"I anticipate it’ll be built. The region’s demand for energy I don’t think is going to slack off, and there are only so many places you can do something like this. This project was sited where it was sited because first off it’s close to the transmission lines, and its close to a water supply for cooling."
Kleen Energy was underwritten by sizeable ratepayer-backed capacity contracts from Connecticut Light & Power – that was money paid to the project not to buy electricity, but purely because it promised to expand power generation in a state which has some of the highest electric rates in the nation.