In 2007, Warburg Pincus invested in APT Generation (APT), an Omaha, Nebraska headquartered portfolio of three natural gas-fired electricity generation plants. Warburg Pincus invested in APT with the view that as electricity demand in the PJM and MISO markets recovered and approached target reserve margins, APT would receive “capacity payments” from local utilities to ensure that the facilities would be ready to operate as and when needed. Without capacity payments of power purchase agreements, there would be insufficient financial inducement to build new generators or to maintain existing generators. Warburg Pincus played an instrumental role during the investment period and evaluated the core asset package, acquiring preferred Dominion assets, selecting the asset management team, and assisting with key strategy decisions such as negotiating forward hedging and setting the capacity auction strategy. Warburg Pincus exited its investment in 2008.
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