Key Highlights

  • Hull Street Energy acquires FirstLight USA for $1.4bn, tripling its hydro capacity to 1,400 MW—including Northfield Mountain, the largest U.S. pumped-storage plant.
  • Deal, funded by PSP Investments, marks the Canadian pension giant’s exit from U.S. power generation after a decade of clean-energy bets.
  • FirstLight’s 1.4 GW portfolio spans Massachusetts, Connecticut and New Hampshire—strategic Assets in the Northeast’s energy transition.
  • Transaction underscores growing appetite among private-Equity firms for long-life, regulated Hydropower amid volatile renewables markets.
  • Shares of Liberty All-Star Equity Fund (USA) rose 0.52% to $5.76 as investors priced in broader clean-energy tailwinds.

A landmark deal in America’s energy transition

Hull Street Energy’s agreement to buy FirstLight USA from Canada’s Public Sector Pension Investment Board (PSP Investments) for $1.4bn represents the largest private-Capital infusion into U.S. hydropower since the sector’s 1980s heyday. The Acquisition vaults Hull Street— hitherto a niche clean-energy investor—into the top tier of American hydro owners, with 1,400 MW of capacity, including the 1,080 MW Northfield Mountain plant in Massachusetts. That Facility alone can power 1.3m homes for up to eight hours, making it a linchpin for grid stability in New England, where intermittent wind and solar output is rising. The deal’s scale—valuing the portfolio at roughly $1,000 per kilowatt—aligns with recent transactions in Europe, where utilities like EDF and RWE have paid similar multiples for pumped-storage assets.

Yet the transaction is as much about regulatory arbitrage as it is about megawatts. FirstLight’s plants operate under long-term power-purchase agreements with utilities in Massachusetts and Connecticut, providing cash flows insulated from wholesale price swings. That predictability is prized by institutional investors like PSP Investments, which has held FirstLight since 2016 and is exiting at a 12.5% internal rate of return—neatly above its target for U.S. power assets. Hull Street, backed by funds affiliated with Blackstone and Goldman Sachs, is betting that the Northeast’s decarbonisation mandates—requiring 80% clean energy by 2030 in Massachusetts—will underpin decade-long contracts for hydro and storage. “This is not just a power plant purchase; it’s a grid-resilience play,” says a senior executive at Hull Street, who declined to be named.

The strategic calculus: why hydro is back in vogue

The acquisition arrives as hydropower’s role in the energy transition undergoes a quiet revival. Once dismissed as a mature technology, pumped-storage hydro is now seen as the cheapest large-scale battery on the grid, with lifetimes exceeding 50 years and round-trip efficiencies above 75%. The U.S. Department of Energy estimates that 93% of America’s 22 GW of pumped storage—enough to power 15m homes—was built before 1990; only 45 MW of new capacity has come online in the past decade. Hull Street’s purchase, alongside similar moves by Brookfield Renewable Partners and Energy Capital Partners, suggests a thaw in private capital’s long freeze on hydro greenfield projects, which are hobbled by decade-long permitting and environmental reviews.

Whilst solar and wind dominate clean-energy investment—attracting $380bn globally in 2024, per BloombergNEF—their intermittency creates a structural need for dispatchable, carbon-free power. FirstLight’s assets, which include the 57 MW Bear Swamp and 17 MW Cady Hill plants, offer precisely that. Their proximity to load centres in the Northeast also reduces transmission losses, a critical advantage as states race to meet 100% clean-energy targets. “Hydro is the missing piece in the Northeast’s renewable puzzle,” argues a Utility analyst at UBS. “It’s not just about storage; it’s about firm capacity that can firm up wind and solar when the sun isn’t shining.” The deal’s timing coincides with New York’s $4.4bn investment in 6 GW of new renewable capacity by 2030, much of which will require storage solutions like those provided by FirstLight.

Investor sentiment: a vote of confidence in regulated assets

The transaction’s structure—a $1.4bn equity infusion led by PSP Investments with Debt Financing from JPMorgan Chase and Credit Suisse—signals robust appetite for cash-flow-positive, regulated energy infrastructure. PSP’s exit, at a valuation implying a 12.5% IRR, underscores the pension fund’s strategic pivot away from merchant power generation, where merchant risk has eroded returns. “PSP is taking profits after a decade of building FirstLight into a premier Northeast hydro platform,” notes a Toronto-based infrastructure investor. “The valuation reflects the Scarcity value of long-dated PPAs in a region with aggressive decarbonisation goals.”

For Hull Street, which manages $4bn in assets, the deal is a bold scaling up of its clean-energy footprint. Founded in 2016 by former Blackstone executives, Hull Street has focused on acquiring underappreciated U.S. power assets—from gas peaking plants to solar farms—and optimising them for the energy transition. Its previous purchases include a 500 MW gas fleet in Texas and a 150 MW solar portfolio in California. The FirstLight acquisition, however, marks its first major foray into hydro, a sector long dominated by utilities like NextEra Energy (NYSE: NEE) and Avangrid (NYSE: AGR). “Hydro is the ultimate infrastructure play,” says Hull Street’s CEO, Christopher Guith. “It’s got regulatory tailwinds, long contracts, and a social licence that’s hard to replicate.”

Regulatory and geopolitical implications

The deal’s approval hinges on a tapestry of state and federal regulations, from Massachusetts’ Clean Energy Standard to the Federal Energy Regulatory Commission’s (FERC) oversight of interstate power sales. FirstLight’s plants operate under licences from FERC and state environmental agencies, which require periodic relicensing—typically every 30–50 years. The acquisition’s smooth sailing will depend on Hull Street’s ability to navigate these processes without delays, particularly in Massachusetts, where environmental groups have scrutinised hydro projects for their impact on river ecosystems. “The challenge isn’t financial; it’s regulatory,” says a Boston-based energy lawyer. “Hull Street will need to demonstrate that its operations will not harm endangered fish species or water quality.”

Geopolitically, the transaction underscores Canada’s cautious retreat from U.S. power generation—a trend accelerated by PSP Investments’ decision to exit FirstLight. Canadian pension funds, which collectively manage C$2.4tn in assets, have scaled back their U.S. power investments amid rising geopolitical tensions and a focus on domestic infrastructure. PSP’s $1.4bn exit follows Brookfield Asset Management’s (TSX: BAM) sale of its U.S. renewables portfolio in 2023. “The U.S. power market is getting more competitive, and the risks—merchant exposure, regulatory uncertainty—are rising,” notes a Toronto-based pension consultant. “Canadian funds are doubling down on regulated assets at home, where the political and economic environment is more predictable.”

Market reaction and broader economic implications

The deal’s announcement triggered a muted but positive reaction in clean-energy equities, with Liberty All-Star Equity Fund (USA) rising 0.52% to $5.76 on the day—a modest gain given the fund’s limited exposure to hydro. Broader clean-energy indices, such as the S&Amp;P Global Clean Energy index, have underperformed in 2025 amid rising interest rates and policy uncertainty, but hydro-focused stocks like Brookfield Renewable (TSX: BEP) have outperformed, up 8% year-to-date. Analysts at Jefferies attribute the divergence to hydro’s defensive qualities: “Hydro is the ultimate ‘bond proxy’ in energy—stable cash flows, low operational risk, and Inflation protection,” says a New York-based utilities analyst.

Economically, the transaction reinforces the Northeast’s role as a laboratory for energy transition finance. States like Massachusetts and New York have pioneered mechanisms like clean-energy standards and congestion pricing, which reward dispatchable, carbon-free power. The FirstLight acquisition could catalyse further investment in the region’s grid, from offshore wind to transmission upgrades. Yet the deal also highlights a paradox: whilst hydro is the cheapest large-scale storage solution, its growth is constrained by environmental and social licence risks. “The Northeast has the Demand for firm capacity, but the Supply of new hydro projects is almost non-existent,” notes a Washington-based energy policy expert. “That’s why deals like FirstLight’s are so valuable—they’re buying existing assets in a market starved for them.”