The Federal Energy Regulatory Commission on Aug. 11 approved the purchase by NRG Yield (NYSE: NYLD), the new “yieldco” affiliate of NRG Energy (NYSE: NRG), of power plant interests now held by subsidiaries of Terra-Gen Power LLC.
On June 10, NRG Yield and NRG Yield Operating LLC, together with project companies Alta Wind I LLC, Alta Wind II LLC, Alta Wind III LLC, Alta Wind IV LLC, Alta Wind V LLC, Alta Wind X LLC, and Alta Wind XI LLC, filed a joint application. They asked for authorization of the indirect acquisition of 100% of the membership interests in the project companies by NRG Yield and NRG Yield Operating.
Terra-Gen is a renewable energy company focused on developing, owning, and operating utility-scale wind, geothermal, and solar generation. Terra-Gen owns about 1,960 MW of renewable generating facilities across six states and 37 projects. Terra-Gen is owned by private equity investment funds managed by ArcLight Capital Partner LLC, which own 61% of Terra-Gen, and Global Infrastructure Management LLC, which owns the remaining 39%.
The Terra-Gen-controlled sellers – TG Finance, NTC AWAM Holdings LLC, CHIPS Alta Wind X and CHIPS Alta Wind XI – will no longer hold any ownership interests in the project companies following the proposed transaction.
Alta Wind I-V and X-XI own and operate 947 MW of wind capacity at the Alta Wind Energy Center at the Tehachapi Pass in California. The entire output of the facilities owned by Alta Wind I-V is committed to Southern California Edison under long-term contracts, with remaining terms in excess of 20 years. Beginning on or before Jan. 1, 2016, the entire output of the generation facilities owned by Alta Wind X and XI will also be committed to Southern California Edison under long-term contracts.
NRG Yield announced in June that it had agreed to acquire the Alta Wind complex in California from Terra-Gen Power for $870m plus the assumption of $1.6bn of non-recourse project financings and subject to customary working capital adjustments.