The Federal Energy Regulatory Commission on July 30 approved the sale of certain power plant interests to Oaktree Capital Group LLC.
On July 1, Arlington Valley LLC, Griffith Energy LLC, GWF Energy LLC (the three companies are known collectively as the Star West Companies), Cogen Technologies Linden Venture LP, East Coast Power Linden Holdings LLC (collectively called the Linden Companies), and Oaktree Capital Group had requested commission authorization for the disposition of jurisdictional facilities.
Oaktree will acquire 100% of the interests in Highstar Capital GP IV Holdings, all of the managing member interests in (which constitute all of the control and approximately 73% of the economic interests in) Highstar Capital Manager LLC, and a portion of the economic interests in Highstar IV Holdco LP.
The Star West Companies are exempt wholesale generators with market-based rate authority. GWF Energy owns and operates three natural gas-fired generating facilities located in California and within the California Independent System Operator balancing authority area (CAISO BAA): a 335-MW facility and two 98-MW facilities. Arlington Valley owns and operates a 577-MW natural gas-fired, combined cycle facility located in Maricopa County, Arizona, within the Salt River Project BAA. Griffith Energy owns and operates a 570-MW natural gas-fired, combined cycle facility located in Mohave County, Arizona, within the Western Area Power Administration-Lower Colorado BAA.
The Star West Companies are wholly-owned by Star West Generation. According to the applicants, Highstar Capital IV indirectly controls, through investment funds and intermediate entities (including Highstar IV Holdco), approximately 62.5% of the voting interests in Star West Generation and therefore controls Star West Generation.
Essom Investment Pte, an indirect wholly-owned subsidiary of Government of Singapore Investment Corporation (Ventures) Pte Ltd., owns approximately 25% of the equity interests in Star West Generation. The remaining approximately 12% interest in Star West Generation is held by Future Fund Investment Company No. 3 Pty Ltd., an independent pension fund of the Australian government.
The Linden Companies, authorized to sell power at market-based rates, together own or control the Linden Facility, a 974.1-MW natural gas-fired combined cycle cogeneration facility located in Linden, New Jersey. The facility has six units. Linden Ventures owns units 1 through 5 (Linden 1-5) at a capacity of 761.6 MW. Linden 1-5 is located in the New York Independent System Operator BAA. ECP Linden Holdings owns the remaining unit (Linden 6) at a capacity of 212.5 MW. Linden 6 is located in the PJM Interconnection BAA. Highstar Capital IV controls 50% of the membership interests in Linden Cogen Holdings LLC, which indirectly owns substantially all of the membership interests in the Linden Companies.
Oaktree is a global investment manager specializing in alternative investments. Under the proposed transaction, Oaktree will acquire 100% of the interests in Highstar Capital IV, all of the managing member interests (which constitute all of the control and approximately 73% of the economic interests) in Highstar Manager, and certain economic interests in Highstar IV Holdco.
According to the applicants, the proposed transaction is not an actual disposition of control. Applicants told FERC that they are public utilities that are governed by directors that will be able to act independently of Oaktree and that enjoy various protections against removal.