The Federal Energy Regulatory Commission on Aug. 22 granted Catalina Solar LLC’s July 16 petition for a declaratory order disclaiming jurisdiction under section 201(e) of the Federal Power Act (FPA) related to a nearly-completed 110-MW project in California.
FERC found, on the basis of the facts and circumstances presented, that Catalina Solar, as the owner-lessor in the sale and leaseback transaction described in the petition, will be passive and will not exercise control or decision-making authority over the leased facility at issue, and will not otherwise be engaged in the business of selling or transmitting electric energy.
Catalina Solar owns a 110-MW, solar photovoltaic facility in Kern County, Calif., with San Diego Gas & Electric (SDG&E) to purchase all of the facility’s output under a long-term power purchase agreement. Catalina Solar has received authorization to sell energy, capacity, and ancillary services at market-based rates.
In a November 2012 FERC order, an entity formed as a Delaware statutory trust (called the Owner Participant) received authorization pursuant to FPA section 2034 to acquire Catalina Solar in a two-step structured lease financing transaction from EDF-Renewable Development (EDF-RD), which is wholly owned by EDF Renewable Energy (EDF-RE). Catalina Solar stated that, in the first step of the transaction, which has been consummated, the Owner Participant acquired and now holds 50.5% of the ownership interests in Catalina Solar, and that EDF-RD holds the remaining 49.5%. Catalina Solar further stated that, in the second step of the transaction, which will be consummated in late summer of 2013 once the facility is completed and commercial operation begins, the Owner Participant will acquire EDF-RD’s remaining 49.5% interest in Catalina Solar contemporaneously with the lease of the facility from Catalina Solar to Catalina Solar Lessee, which is indirectly wholly owned by EDF-RE.
Catalina Solar Lessee has been created to manage and operate the facility after the transaction is completed so that operational control of the facility will be retained by EDF-RE. Catalina Solar explains that, during the term of the lease, Catalina Solar Lessee will assume responsibility to sell the facility’s full output to SDG&E under the long-term power purchase agreement.
The facility consists of photovoltaic panels and generation lead line facilities necessary to connect Southern California Edison’s Whirlwind substation and the transmission system operated by the California Independent System Operator.