- by Brian Dowling, March 25, 2015, Hartford Courant
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Leidos Inc. is selling its Plainfield wood-fired power plant to Greenleaf Power, a Sacramento company that is buying biomass plants across North America.
Greenleaf Power announced Wednesday it has agreed to buy the 37.5-megawatt power plant in a deal it expects to close later this year.
The company bought four California biomass plants in 2010 and 2011 and a Canadian plant in 2013. In a statement, Greenleaf President Hugh Smith said, "Plainfield solidifies Greenleaf Power's presence throughout North America as the leading owner-operator of biomass power facilities."
He added, "This facility holds tremendous promise and we look forward to working closely with the Plainfield community."
The Plainfield Renewable Energy plant incinerates wood from construction waste and other sources that would otherwise be openly burned or dumped in a landfill, said Greenleaf, which is majority-owned and managed by Denham Capital, a Boston private equity firm.
The young biomass plant, a project initially valued at $225 million, has already shifted ownership once.
In October 2013, as the secured lender n the project, Leidos Holdings took the title to the plant from the initial owner, Enova Energy Group, which failed to complete construction on the facility. Months later, the biomass plant began producing power and selling it to Connecticut Light & Power under Connecticut's clean power program known as Project 150.
But operation of the plant proved difficult for Leidos. The plant failed to be profitable for the company and suffered numerous shutdowns over the last year, according to Leidos. The plant reported $6 million in operating losses in the fourth quarter of 2014.
"Clearly, the Plainfield project has had adverse impacts to our financials," Mark W. Sopp, Leidos' chief financial officer, said Wednesday in a conference call with investors.
Sopp said Greenleaf Power will pay Leidos $30 million in cash and provide a secured note of about $80 million at closing. Leidos sold the power plant for $40 million less than what was listed on the company's balance sheet. But the company was glad to be done with it.
"While we are disappointed with the further impairment to the value embedded in the sales price, we do believe for many reasons that accepting this offer was the best course of action for the company and our shareholders," Sopp said.