Selling a Power Generation Business

Most operating generation assets trade on a cash-flow metric (often EBITDA), then get adjusted for contract profile, reliability, and near-term maintenance or capex. A clean, assignable PPA with a credible counterparty usually supports tighter underwriting, while merchant exposure makes buyers lean on conservative dispatch and price cases. Interconnection limits, congestion, and curtailment can move value a lot, especially at a weak node. You can sanity-check a range with Rejigg’s free valuation calculator, then tighten assumptions using your outage and settlement history.

For a contracted plant, buyers underwrite the PPA details: counterparty credit, assignment and change-of-control consents, performance guarantees, curtailment treatment, and term remaining. For a merchant plant, they focus on dispatch and downside: nodal basis, congestion patterns, cycling and starts, heat rate or performance, and any hedging approach. In both cases, buyers stress-test forced outages because one trip during peak pricing can swing results. Rejigg helps you organize settlements, dispatch history, and key contract excerpts in a buyer-friendly data room.

It depends. Many power deals do not fit the SBA well because they are capital-heavy, regulated, and often held in project SPVs with collateral and consent complexity. Smaller behind-the-meter assets, CHP sites attached to an operating business, or simpler service-plus-asset models can be more financeable than utility-scale projects with tight interconnection and PPA rules. Even when SBA is possible, lenders dig into settlement-to-cash proof, contract assignability, and post-close operator coverage. You can model scenarios with Rejigg’s SBA loan calculator.

Many well-run processes close in 4–9 months, but timelines vary by contract consents and diligence readiness. PPA consent, interconnection transfer steps, and any required credit support can add weeks or months. Deals also slow down when outage and maintenance records are incomplete or when settlements cannot be reconciled to cash quickly. Permitting clean-up and upcoming major outages can stretch the schedule further. Rejigg helps by letting you pre-build a secure data room, collect digital NDAs, and keep buyer Q&A organized outside of email.

No. Some owners use brokers for buyer access and process management, but you can run a process yourself if you can control confidentiality and present a tight diligence package. Fees are often 5–10%, which can be meaningful on assets that already require paid technical advisors. Rejigg gives sellers vetted buyers, digital NDAs, a built-in data room for PPAs, interconnection, and permits, plus deal tracking to compare offers. Sellers list for free and keep control of the timeline.

Beyond financials, buyers usually ask for your PPA or market participation agreements, an interconnection agreement and studies, outage and maintenance logs, a forward major maintenance plan, a permits-and-compliance file, settlement reports, meter ownership and calibration records, O&M and OEM service agreements, an insurance summary and material claims, and a clear picture of what entity is being sold (SPVs, contracts, ownership). Rejigg’s preparation guide and data room help you structure this so diligence stays fast.

Common deal killers include slow or uncertain consents for PPAs and key O&M agreements, interconnection constraints or upgrade obligations that change the economics, forced outage patterns that point to a near-term reliability drop, and permit or compliance issues that could cap run hours or trigger retrofits. Another frequent problem is settlement ambiguity. If you cannot tie MWh to cash, buyers assume leakage or hidden offsets. Rejigg reduces surprises by pushing you to surface critical documents early and share them with vetted, NDA-signed buyers.

Working capital in generation often comes from settlement timing, reserve accounts, fuel balances for thermal plants, spare parts inventory, and payables tied to planned outages. Buyers may propose a working-capital peg or adjustment because cash collection can lag production and true-ups can be lumpy. Seasonality matters in many markets, so it is worth normalizing for high and low settlement months and any maintenance accruals. Rejigg’s deal tracking helps you compare offers where one buyer’s peg effectively reduces proceeds at close.

Earnouts in generation often use measurable items like availability, net generation, capacity accreditation, or post-close revenue, especially when performance upgrades or curtailment trends are uncertain. The main risk is control. Dispatch decisions, maintenance timing, and market conditions can drive the earnout even if the seller’s historical operations were solid. If you consider an earnout, define data sources (settlements and meter reads), adjustment rules for major outages, and who controls dispatch and maintenance choices. Rejigg helps you compare term sheets so earnout risk is visible, not buried.

Change-of-control language can require consent, trigger new credit support like an LC, or open a renegotiation window. That can add real time between LOI and closing and give the counterparty leverage if they move slowly. Pull these clauses early, map the consent steps, and prepare a buyer capability packet that addresses technical and financial strength. Rejigg’s NDA and data room workflow lets you share the relevant sections with qualified buyers and track approvals and deadlines in one place.

Most buyers adjust pricing for near-term major maintenance by reducing enterprise value, requiring an escrow or holdback, or treating the spend as debt-like if it is hard to avoid while staying within PPA performance requirements. What helps most is a credible plan: clear scope, outage window, contractor or OEM quotes, and history from prior outages. If the unit has been cycling more, buyers often assume shorter maintenance intervals. Rejigg helps you present the forward plan with supporting records so pricing discussions stay grounded in facts.

Taxes depend on structure and jurisdiction. Asset versus equity sales, allocation between equipment and contract value, depreciation recapture, and state or local taxes tied to the site can materially change after-tax proceeds. SPV ownership can add partnership or member tax complexity, and many projects have large depreciation histories that make allocation a big swing factor. Talk to a tax advisor before signing an LOI so you can negotiate structure and allocation with eyes open. Rejigg’s offer comparison makes it easier to weigh LOIs that look similar but produce different after-tax results.

Buyers often value a plant in two parts: the equipment and the right to inject power under a specific interconnection agreement at a specific node. In constrained areas, deliverability and interconnection rights can rival or exceed the value of the physical plant because replicating them can take years. Upgrade obligations, seasonal limits, or basis volatility can cut that value quickly. The cleanest approach is to present equipment condition and performance separately from interconnection terms, studies, and upgrade responsibilities. Rejigg’s data room helps you organize diligence around both.

Many transitions run 30–180 days, depending on how fast credentials, permits, and market system access can be reassigned and whether a planned outage is coming up. Buyers often want the seller or key managers available through the first settlement cycle, the first capacity or ancillary test window, or the first major maintenance event. A strong transition plan lists who holds each credential, who owns ISO and utility communications, and what day 1, 30, and 90 responsibilities look like. Rejigg’s transition planning guide turns that into a checklist.

Confidentiality matters because outages, PPA terms, and interconnection constraints can create employee and counterparty noise if they leak. Most sellers stage disclosure, starting with a teaser, then a summary, then documents after an NDA and buyer vetting. Rejigg protects that process by pre-vetting buyers and requiring digital NDAs before sensitive materials are shared. You control access in the data room, down to specific folders, so you can release interconnection studies or permit files only when a buyer is serious.

An LOI should cover structure (asset or equity), price and adjustments (working capital and debt-like items), treatment of upcoming major maintenance, escrow or holdbacks, transition services, required third-party consents (PPA, interconnection, O&M), diligence scope, exclusivity, and any earnout or seller financing terms. In generation deals, it is also worth spelling out how contract consents affect the outside closing date. Rejigg’s negotiation guide and offer tools help you compare terms beyond headline price.

Power generation diligence is more technical and operations-heavy than many industries. Buyers still review financials and legal, but most value sits in dispatch and settlement history, forced and planned outage reality, interconnection constraints, permit limits, and maintenance cycles. Many buyers bring technical advisors to review heat rate or PR, equipment condition, spares strategy, and compliance processes, while lawyers focus on PPA and O&M assignment and change-of-control language. Rejigg’s due diligence checklist and data room keep these workstreams organized.

Start with the asset’s core risks and where the upside comes from. Merchant-heavy assets with dispatch optimization usually fit buyers with trading and asset management capability. Long-term PPA assets with straightforward O&M often fit financial buyers that want stable cash flows. If you have interconnection issues, consent complexity, or a major outage coming up, prioritize buyers with a track record on execution and strong vendor and operator bench strength. Rejigg brings vetted buyer types into one process and includes buyer targeting guidance to avoid dead-end diligence.