In 2003, Iron Bridge acquired the Tanguisson Power Plant in Dededo, Guam from the Mirant Corporation, headquartered in Atlanta. Iron Bridge formed Pruvient Energy along with two other individual partners to purchase the subsidiary ownership C-corp from Mirant.
The U.S. Navy built the Tanguisson plant in the early 1970s, and Hawaii Electric did a full name plate refurbishment in 1997, when the plant was barely functional. The plant was later sold to the Mirant Corporation as part of a larger portfolio sale. The plant has two 25-megawatt steam turbines that burn Number 6 diesel fuel, which is a fuel oil.
After Hawaii Electric rehabilitated the plant, it operated under a public/private partnership via long-term power purchase agreement with the Guam Power Authority, whereby the Authority paid for the availability to produce power and provided much of the labor and all of the fuel to operate the plant. Mirant ran into some financial difficulties in 2002 and put a lot of assets up for sale to meet debt balloon payment coming due. Iron Bridge participated in a sales process to purchase the plant in 2002 among international competition. As the successful bidder, Iron Bridge owned the plant from 2003 until 2015, when Iron Bridge sold it back to the Guam Power Authority.
During Iron Bridge’s tenure, the plant ran 24 hours a day, seven days a week (other than forced or scheduled outages) and employed approximately 50 full-time management and operating staff members. Iron Bridge, through its Pruvient Energy subsidiary, worked with the Guam Power Authority to dispatch the plant and provide reliable power to the island of Guam.
Iron Bridge was able to secure financing for the acquisition at a time when financing for power plant acquisitions or development was scarce and difficult. Enron’s bankruptcy had temporarily frozen the traditional financing options for power assets. After pursuing several financing options, Iron Bridge ultimately issued and sold taxable bonds to finance the purchase of the plant with bond insurance as a credit enhancement providing a single “A” investment grade rating.
Pruvient initially found a number of operating efficiencies upon acquiring the plant, but also reinvested significant capital to ensure operations remained reliable for the foreseeable future. The plant consistently ranked as the most reliable and well-run plant on Guam. Initially, Iron Bridge hired a third party management firm to manage the plant, but quickly realized the firm was not effectively managing the asset.
Before the end of the first year of ownership, Iron Bridge created its own plant management entity and gained approval from the bondholders for that entity, Energy Management Services, to take over the day-to-day management of the plant for the remaining period of ownership.
Upon sale of the plant in 2015, Pruvient was able to retire all of the debt early, provide all staff with one year of severance pay and benefits, and provide an attractive return to Pruvient shareholders. After acquiring the plant, Pruvient was able to eliminate waste and bring certain services in-house, greatly improving cost and operating efficiencies at the plant and reducing island-wide power outages that were once commonplace on Guam.
Further, Pruvient always operated the plant well within established EPA emissions guidelines and monitored its environmental impacts closely to ensure that the plant was minimizing its environmental impacts while producing reliable power. Pruvient undertook several capital projects that improved operations and reduced harmful emissions and operating costs, including a restoration of the original smokestacks, a material improvement to the water chemistry and worked with the University of Guam to monitor and manage water quality around the plant.