Pattern Energy Group Inc.’s (Nasdaq: PEGI) development executives all touched down in Houston this week to finalize planning for the next step in an $8 billion, 3.5-gigawatt expansion of the company’s New Mexico wind energy footprint.
While its executive team and financiers are based in its San Francisco headquarters, Pattern’s core development team and control room are here in Houston, said Cary Kottler, vice president of North American development. Kottler is one of the executives based in Houston.
“We have big plans to expand the number of projects we develop, build, own and operate right here from this office,” Kottler said.
Pattern is structured around two sibling companies, Pattern Energy and Pattern Development. Pattern Energy, the publicly traded entity, owns and operates many of the renewable power projects produced by Pattern Development. Pattern Energy also owns about 30 percent of Pattern Development, whose remaining interest is held by other private funding sources. Both companies share an executive team.
The tip of the spear
Pattern is preparing to start construction in 2020 on the Western Spirit transmission line — that’s what the team came to Houston to discuss. The project is meant to open the door for further investment in New Mexico wind farms, said Johnny Casana, senior manager on Pattern’s U.S. political and regulatory affairs team. Once Western Spirit is done, Pattern has an agreement in place to sell it to New Mexican utility company PNM for about $300 million, but the real prize is the more than $1 billion in wind farm projects the transmission line will enable.
The company is already in negotiations with potential buyers for the power those new wind farms would produce, Kottler said. Pattern has even reached the final phases of discussions with some, though Kottler couldn’t comment on the counterparties in those deals yet, he said.
“This is the tip of the spear for growing the company,” Kottler said.
And that creates opportunities for growth in Houston, Kottler siad. Pattern employs 120 people in Houston right now, and as the company creates more assets and projects, it opens the potential for headcount growth in the Bayou City, Kottler said.
Pattern Energy, the public entity, produced $483 million in 2018 revenue, according to its most recent annual report.