New Projects, Renewables, Solar, Wind

I Squared Capital partnering with clean energy-focused venture firm

Energy infrastructure investment firm I Squared Capital announced it has entered into an exclusive, strategic partnership with another private venture firm focused on driving clean energy and efficiency adoption by regulated utilities.

Squared Capital is partnering with Twenty First Century Utilities (TFC) through the former’s ISQ Global Infrastructure Fund II. TFC was formed four years ago and is focused on development and assets in the power and utilities sectors of the U.S., Canada and the West Indies.

TFC’s current managing partners, Larry M. Kellerman and Peter L. Corsell, will join I Squared Capital as managing directors where they will continue to focus on TFC’s pipeline as well as developing new initiatives within the firm. TFC will continue as a standalone company headquartered in Washington, D.C.

Bhandari

“The TFC team is well positioned with its current pipeline of opportunities to benefit from fundamental changes in the power sector,” said Gautam Bhandari, Managing Partner of I Squared Capital. “In addition, Larry and Peter bring tremendous experience in utility management and operations, power infrastructure development and optimization, and the commercialization of innovative energy technologies to I Squared Capital.”

TFC’s founders have advocated for new investor-owned utility models. Kellerman and Corsell, speaking with interviewer Charlie Rose on television two years ago, Kellerman talked about his career start with Southern California Edison and work in the utility sector.

“This is an industry I’ve grown up with; this is an industry that has been transformational since its very founding more than a century ago,” Kellerman told Rose in 2017. “There are technological changes occurring in the ecosystem of electrical production, generation and use that makes the utility even more relevant in today’s world than it has in its entire history.”

The mission of the business model is to take the regulated utility model and make it more energy efficient, he added. Corsell said that the company’s “million rate base model” would give each customers it’s own rate base plan, much like consumers have different cell phone plans.

“The utility is nothing if not a bank,” Corsell said on the Rose show. “It is a steward and system planning and financier of infrastructure assets. So we’re offering our customers the chance to buy these technologies at the lowest conceivable cost…the ability to have on-bill financing so they can pay for this technologies over time.”

The company’s future bet is that coal, for financial reasons, will be phased out and non-hydro renewables will continue to advance. Kellerman criticized the lack of a cohesive or forward-looking U.S. energy policy.

“In our view, all of the above is not an energy policy,” he said. “You have to make choices to consciously evolve the system in a thoughtful manner.”

The TFC website does not list any announcements of the company’s specific investments.

I Squared Capital has more than $10 billlion in assets under management. Three years ago, it acquired Lincoln Clean Energy, which has developed nearly 2 GW of wind energy projects since its founding in 2009. 

I Squared Capital sold Lincoln to global wind developer Ørsted in August 2018.

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POWERGEN International, happening Nov. 19-21 in New Orleans, will be an all of the above conference and exhibition. POWERGEN will feature content and exhibitors who work in the coal, gas, nuclear, wind, solar and hydro sectors.