In addition to the natural gas-fired generator, the purchase from affiliates of LS Power Equity Advisory LLC includes major spare parts and a 108-kilometre transmission line in the state.
"The acquisition of Blythe is an important addition to our power business," AltaGas chairman and CEO David Cornhill said in announcing the deal Monday.
"The power purchase agreement provides stable earnings and cash flow and, with the infrastructure in place today, the facility is well positioned to access two premium power markets in California and Arizona in the future."
The money to pay for the acquisition will come from a combination of debt and equity including a new US$300-million senior unsecured revolving credit facility from the Toronto-Dominion Bank and the Royal Bank of Canada.
Calgary-based AltaGas also said it has signed a deal to sell 10.1 million shares at $34.90 each to a syndicate of underwriters to raise $352 million to help pay for the deal.
An over-allotment option could increase the size of the offering to $405 million if it is fully exercised.
AltaGas said the acquisition is expected to be add to earnings and cash flow per share in 2014, the first full year of ownership.
Blythe has a power purchase agreement through to July 2020 with Southern California Edison, the provisions of which match revenues to all major plant costs.
AltaGas is an energy infrastructure business with a focus on natural gas, power and regulated utilities.
Shares in the company closed down $1.14 at $34.90 on the Toronto Stock Exchange on Monday.