The Federal Energy Regulatory Commission on Aug. 14 approved the sale of an upstream ownership interest in an in-construction, 250-MW solar project in Arizona controlled by Arizona Solar One LLC.
On July 12, Arizona Solar One requested commission authorization to transfer to Liberty Solar Energy LLC certain indirect, passive ownership interests in Arizona Solar One by means of the sale to Liberty of passive, non-controlling interests in ASO Holdings Co. LLC, the sole member of Arizona Solar One. The jurisdictional facilities consist of Arizona Solar One’s market-based rate tariff, associated contracts, and various books and records.
Arizona Solar One is completing construction of, and will own and operate, a 250-MW solar facility located in Gila Bend, Ariz., together with associated interconnection facilities, which include an approximately 22-mile 230-kV generation tie line connecting the facility to the transmission system of Arizona Public Service (APS). This project is located in the APS balancing authority area (APS-BAA), which, according to the application, is the relevant market.
Arizona Solar One stated that it received prior authorization from the commission under a December 2011 delegated order for a transaction involving the transfer of certain passive membership interests from ASO Holdings to an affiliate of Banco Santander S.A. Arizona Solar One stated that the December 2011 order also authorized Abengoa Solar LLC to repurchase the passive non-controlling interests in ASO Holdings from the Banco Santander affiliate, at a date no later than Dec. 31, 2014 (called the “repurchase transaction”). Arizona Solar One represents that contemporaneously with the proposed transaction, Abengoa Solar intends to implement the repurchase transaction.
The December 2011 order also authorized the disposition to unidentified investors of additional passive, non-controlling membership interests in ASO Holdings, subject to certain conditions. The application represents that the ASO Holdings’ “Class A” membership interests to be transferred to the unidentified investors were limited in the aggregate to no more than 45% of the total equity in ASO Holdings, and indirectly, in Arizona Solar One.
According to the application, because the proposed transaction involves the transfer to Liberty of passive, non-controlling Class A membership interests in ASO Holdings comprising approximately 53% of ASO Holdings’ total equity interest, Arizona Solar One believes that it does not have authority to proceed with the proposed transaction under the December 2011 order, and is requesting such authorization within this docket. Arizona Solar states that following approval of the proposed transaction, it will no longer pursue the transfer of the Class A membership interests to unidentified investors as provided in the December 2011 order.
Abengoa Solar is a developer of solar energy projects in the United States, and is a direct, wholly-owned subsidiary of Abengoa Solar S.A., a company organized under the laws of Spain. In turn, Abengoa Solar S.A. is 99.99% owned by Abengoa S.A., a Spanish company that is listed and publicly traded on the Madrid Stock Exchange.
Abengoa Solar wholly-owns the following subsidiaries in addition to Arizona Solar:
- Mojave Solar, which is developing a concentrated parabolic trough solar power facility with a capacity of about 250 MW in San Bernardino County, Calif. The Mojave project is expected to begin commercial operation around March 31, 2014, and will be located within the California Independent System Operator (CAISO) balancing authority area. All of the Mohave project’s electric capacity is committed to Pacific Gas & Electric under a power purchase agreement.
- Palen Solar Holdings LLC, which is developing a concentrated solar facility of up to 500 MW at a project site approximately 10 miles east of Desert Center, Calif., in Riverside County. The Palen Solar project is still under development. Abengoa Solar owns an equity interest in Palen Solar and has rights to acquire up to 60% of the equity interests in Palen Solar.
- ASI Operations Inc., which will serve as the operations and maintenance company for both the Mojave project and for the Arizona Solar One facility, but will not have an ownership interest in either project.
Liberty is a wholly-owned subsidiary of Liberty Interactive LLC, which is a wholly-owned subsidiary of Liberty Interactive Corp. Affiliates of Liberty hold passive, non-controlling tax equity interests in two limited liability companies. These limited liability companies in turn hold beneficial interests in trusts that entered into sale/leaseback transactions related to the Alta II wind farm (about 150 MW) and the Alta IV wind farm (about 102 MW) projects. Both the Alta II and Alta IV wind farm projects are located in Kern County, Calif., and all power generated by the two wind projects is sold to Southern California Edison within the CAISO balancing authority area.
Also, an affiliate of Liberty owns a 1-MW photovoltaic solar array in Rocky Mount, N.C., which is being expanded with a new 2.89-MW solar system currently anticipated to be completed in the late summer to early fall of 2013. All power generated by this solar project is being sold to North Carolina Electric Membership Corp.