Recurrent Energy to sell six solar projects to KKR, Google

RE Rosamond One LLC and RE Rosamond Two LLC, which control two in-development 20-MW solar projects in California, applied Nov. 1 at the Federal Energy Regulatory Commission for approval of the sale of those companies.

The planned transaction involves the transfer of these companies from their upstream owner, Recurrent Energy LLC, to Gamma Genco CV II LLCThe Class B membership interests of Gamma II are wholly-owned by SunTap Energy (Pearl) LLC, which also is the Managing Member of Gamma II. The passive Class A membership interests of Gamma II are wholly owned by Gran Torino Solar SW LLC.

SunTap is ultimately controlled by an investment fund affiliated with investment house Kohlberg Kravis Roberts & Co. LP. Gran Torino is ultimately controlled by internet search engine company Google Inc.

Each of Rosamond One and Rosamond Two is developing a 20 MW (AC) solar facility located in Kern County, Calif. The facilities are located on adjacent sites within the California Independent System Operator (CAISO) balancing authority area (BAA). The facilities, which have gotten various FERC approvals, will be a qualifying small power production facility (QF) under the Public Utility Regulatory Policies Act and will be interconnected to the transmission system owned by Southern California Edison (SCE) and operated by CAISO. The Rosamond companies anticipate that each facility will commence commercial operation by Dec. 6, 2013.

All of the output from the Rosamond One Facility will be sold to the City of Santa Clara under a 25-year power purchase agreement (PPA). All of the output from the Rosamond Two Facility will be sold to SCE under a 20-year PPA.

All of Recurrent Energy’s regular ownership interests are owned by Sharp US Holding, which is a wholly-owned subsidiary of Sharp Corp., which is a Japanese multinational corporation that designs and manufactures consumer electronics and electronic components, including solar cells.

In this transaction, all of the membership interests in the applicant companies will be transferred to Gamma II at closing. Gamma II also will acquire four other QF projects currently owned by Recurrent that are expected to achieve commercial operation prior to or soon after closing: RE Victor Phelan Solar One LLC (17.5 MW); RE Rio Grande LLC (5 MW); RE Columbia 3 LLC (10 MW); and RE Gillespie (15 MW). Victor Phelan, Rio Grande, and Columbia 3 will be located within the CAISO BAA. Gillespie will be located in the Arizona Public Service BAA.

Section 203 approval from FERC is not requested or required for the disposition of membership interests in any of Victor Phelan, Rio Grande, Columbia 3, or Gillespie because none of these QF projects will have a generating capacity that exceeds 30 MW. FERC approval is needed for the Rosamond facilities because combined they exceed 30 MW.

As a result of the transaction, the entities acquired by Gamma II will no longer be affiliated with Recurrent or any of its affiliates, except for the QFs owned by Gamma Genco CV LLC (i.e., the McKenzie Entities, the Bruceville Entities, the Dillard Entities, and the Kammerer Entities).

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.