Good news has been scarce lately. But Canadian Edge Conservative Holding Brookfield Renewable Power Fund (TSX: BRC-U, OTC: BRPFF) has provided plenty for investors to cheer about this week.

The power fund–which hasn’t yet converted to a corporation–announced Tuesday it will combine assets with parent Brookfield Asset Management’s (TSX: BAM/A, NYSE: BAM) remaining renewable energy portfolio. The result will be the world’s largest renewable energy generation pure play, Brookfield Renewable Energy Partners LP.

Equally important, the deal will result in an immediate 10 percent boost in distributable cash flow (DCF) per unit relative to current power fund DCF per unit. That will return our Brookfield Renewable position to dividend growth, with an initial boost to an annualized rate of CAD1.35 per unit, up from the current CAD1.30, when the deal closes. After that, management projects annual growth of at least 3 to 5 percent, as the company continues to add assets.

The merger will require approval by two-thirds of Brookfield Renewable Power Fund unitholders, excluding the shares held by the parent. Investors will receive details shortly, with a vote expected by November 2011.

I strongly encourage Canadian Edge readers to vote “yes” and to exchange their Brookfield Renewable Power Fund units for Brookfield Renewable Energy Partners LP units per Brookfield Asset Management’s offer. For one thing, while Brookfield Renewable’s return to dividend growth is the single biggest near-term positive to this deal, the longer-term benefits are likely to be even greater.

The new entity will control more than CAD13 billion in hydro, wind and pumped storage power facilities with 4.4 gigawatts of installed capacity. That portfolio will expand by another gigawatt (1,000 megawatts) in the next 24 months, as new facilities under development in Canada (40 percent output), the US (40 percent) and Brazil (20 percent) come on stream. And there’s another thousand megawatts worth of projects in the works to come on line after that.

Approximately 86 percent of post-deal generation will be hydro, with 10 percent wind and 4 percent pumped storage. (Pumped storage basically involves pushing water from lower to higher elevation in off-peak hours and then releasing it back downhill to generate energy during peak demand hours.)

All of the new entity’s generating capacity is under long-term contract to utilities, state-owned entities and other super-creditworthy partners. The average contract duration is 24 years and there are built-in rate increases tied to inflation, as well as automatic renewals at Brookfield Renewable’s option.

Regulators in Brazil ensure hydropower producers against the risk weak water flows will reduce generation and revenue. In the US, company ownership of water storage capacity will limit water flow risk, while diversified watershed exposure reduces weather risk in Canada. Adding its parent’s assets in the US and Brazil will thus curtail the ups and downs in generation and revenue that Brookfield Renewable Power Fund has experienced in recent quarters.

Parent Brookfield Asset Management has managed and been a major unitholder of Brookfield Renewable Power Fund dating back to when the income trust was still known as Great Lakes Hydro Income Fund. The parent has steadily grown the fund’s assets by asset “drop-downs,” most notably the summer 2010 deal that moved 15 hydro plants and one now completed wind power project to Great Lakes, a deal that also resulted in the name change to Brookfield Renewable Power Fund.

This merger is a final combination of all of Brookfield Asset Management’s renewable power assets into one partnership, which the parent will continue to manage and own 73 percent of. It will also henceforth be Brookfield Asset Management’s primary vehicle for investing in renewable energy generation.

The new arrangement holds many incentives for the parent and general partner to run the assets well, pursue successful new construction and/or acquisitions and, above all, to boost distributions over time. And the partnership will enjoy increased access to financing, further enhancing its ability to grow over time.

The upshot is a new Brookfield Renewable with enhanced ability to grow that’s even better protected against economic ups and downs. With bigger and more reliable total returns on tap, I’m raising my buy target on Brookfield Renewable Power Fund to USD25 for those who don’t already own it.

Some Canadian limited partnerships have in the past presented some challenges for US investors, with some actually forbidding ownership by non-residents. That won’t be the case with Brookfield Renewable Energy Partners.

Management has assured investors in both Canada and the US that they’ll be able to exchange fund units for partnership units on a tax-free basis. It’s also advised that the deal will extend tax advantages well past the 2014 threshold previously cited as when the fund would have to start paying taxes and promised tax-deferred distributions to both US and Canadian investors as well.

Finally, Brookfield Renewable now plans to apply for a listing on the New York Stock Exchange (NYSE) “in order to improve liquidity, deepen the investor base and enhance ability to fund growth.” That suggests a very easy transition indeed for US investors to the bigger and better Brookfield Renewable.

Turning briefly to the rest of the CE Portfolio, Brookfield Renewable’s announced distribution increase extends the list of dividend boosters to nine, counting the expected 5 percent boost by Atlantic Power Corp (TSX: ATP, NYSE: AT) when it completes the takeover of Capital Power LP (TSX: CPA-U, OTC: CPAXF).

My expectation is we’ll see more over the next six to 12 months, as management teams put abundant cash flow to work. Brookfield Renewable’s move is extraordinary, in that it’s happening as investors seem to have become ultra-cautious. As such, it’s a very good sign for this company’s underlying strength.

Other companies, however, are likely to remain a bit cautious, at least until the macroeconomic picture becomes a bit less cloudy. My approach is to continue to look at all of our Holdings for assurance they’re weathering tough conditions as businesses. That’s ultimately what ensures dividends and sets stock prices, though we should also expect volatility in the coming weeks.

Remember, this is still the same market we’ve been in for three years-plus. On the days when investors are pessimistic, everything sells off. Such days can be good ones to pick up shares of companies you like at good prices, but they can also be trying for those already in stocks that lose ground. Conversely, recovery often comes faster than anyone expects, as money pours back into the market when the news seems less dire.

The result is most CE stocks continue to be generally range-bound for the time being. Just recognize that stocks are not bonds or savings accounts. Prices move around in the near term–and sometimes go in the wrong direction for uncomfortably long periods of time.