Essential Utilities sells 3 microgrids in Allegheny County for $165M

Water and natural gas utility, Essential Utilities, Inc. is selling three non-utility microgrid and district energy properties — at Pittsburgh International Airport, a local hospital and Allegheny County government buildings — for $165 million.

The buyer is Cordia, a Phoenix-based energy company that is looking to expand its footprint in the region.

The deal covers microgrids and district energy systems developed by Peoples, Essential’s natural gas subsidiary.

The Pittsburgh International Airport microgrid allows the Findlay airport to operate independent of the electric grid due to a 21.25-megawatt natural gas power plant supported by on-site gas production.

The district energy system at Allegheny Health Network – Wexford provides the 160-bed hospital with all heating, cooling and primary power needs via steam boilers, hot water boilers, chillers, and a 2.0-megawatt natural gas generator, along with emergency backup power.

The Allegheny County District Energy system provides steam and hot water services to six government buildings, including the Allegheny County Courthouse and City-County Building, using seven steam boilers and one domestic water heater.

All three systems have been operating since 2021.

“Selling these unregulated assets to a skilled and experienced operator in Cordia allows us to focus more fully on our core business as a regulated utility, while continuing to support projects that create a more resilient, sustainable energy grid,” said Essential Utilities CEO Chris Franklin.

Essential said it selected Cordia in part because of their expertise in microgrids and district energy systems, along with their established footprint in Pittsburgh.

Cordia already operates energy systems in Uptown and on the North Shore, as well as the on-campus energy system for Duquesne University.

“Our decades of experience owning, managing, and operating energy systems will allow our new customers to focus on their core businesses,” said Cordia CEO Earl Collins in a statement.

The company has operated in the region since 1964, it said.

The sale is subject to closing conditions and regulatory approvals. It’s expected to close in late 2023 or early 2024.

Essential will use the $165 million in proceeds to finance its capital expenditures and water and wastewater acquisitions.