Gulf Pacific Power to acquire partial stake in Astoria Energy II

Astoria Energy II LLC (AE II) on Oct. 16 applied with the Federal Energy Regulatory Commission for approval of the sale of what amounts to a minority stake in a gas-fired power plant in New York to Gulf Pacific Power LLC.

AE II asked for prior authorization for the indirect disposition of jurisdictional facilities that will result from the transfer of indirect equity interests currently held in AE II from SNC-Lavalin Generation (SNC) to Gulf Pacific Power or its wholly-owned subsidiary. As a result of the proposed transaction, SNC will transfer 66% of its indirect Class A voting equity interests in AE II (comprising 13.2% of the total indirect Class A voting equity interests in AE II) to Gulf Pacific. Following the transaction, SNC will retain 6.8% of the total indirect Class A voting equity interests in AE II.

AE II said it intends to close the transaction promptly after obtaining FERC and New York State Public Service Commission authorizations. It also filed an Oct. 16 application with the New York PSC on this matter. The company asked FERC for a 21-day comment period and FERC action on this application within 10 days of the end of the comment period.

AE II is the 100% owner of the Astoria II project, which is located exclusively within and interconnected into the New York City submarket (Zone J) of the New York Independent System Operator (NYISO). AE II is an exempt wholesale generator (EWG) and is located adjacent to the Astoria Energy LLC (AE I) project. AE II was organized solely for the purpose of developing, owning, and operating Astoria II, an approximately 550 MW (summer rated) facility. AE II does not own or control any other generating facility.

The Astoria II project entered into commercial service during 2011. The output of Astoria II is fully committed through June 30, 2031, to the New York Power Authority (NYPA), consistent with a resolution of NYPA’s Trustees adopted in April 2008 and a master power purchase and sale agreement, dated July 11, 2008, as amended.

Gulf Pacific is an investment fund managed by Harbert Gulf MM LLC, which is a subsidiary of Harbert Management Corp. The California Public Employees’ Retirement System (CalPERS) has committed to provide 97% of the aggregate capital committed to Gulf Pacific by its members, and no other member owns 10% or more of Gulf Pacific.

A Harbet fund, called Harbert Fund III, already holds indirect ownership interests in AE I and AE II (through JEMB/Harbert and JEMB Astoria II LLC). AE I owns and operates an approximately 540 MW (summer rated) natural gas-fired wholesale electric generator in Astoria, Queens, New York City. AE I has market-based rate authorization and maintains EWG status. AE I sells 500 MW of its capacity and on-peak energy at market-based rates to Consolidated Edison Co. of New York under a long-term power purchase contract, and may at times sell small quantities of surplus electricity into the NYISO market.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.