FERC okays sale of Wheelabrator power plants to Energy Capital Partners

The Federal Energy Regulatory Commission on Nov. 25 approved a series of possible transactions involving a change in control for some Wheelabrator Technologies Inc. waste-to-energy facilities.

On Aug. 5, Wheelabrator Technologies filed an application requesting authorization for: a transaction under which Waste Management Holdings Inc., National Guaranty Insurance Co. of Vermont, Mountain Indemnity Insurance Co. and Chemical Waste Management Inc. agree to sell, and Granite Acquisition Inc. agrees to purchase, 100% of the ownership interests in Wheelabrator Technologies; and a series of related transactions under which either Wheelabrator would also acquire 100% of the ownership interests in WTE Holdings, which would be the passive owner of the fee interests in certain jurisdictional facilities that are currently operated by certain Wheelabrator Technologies subsidiaries, or such subsidiaries of Wheelabrator would directly acquire such fee interests in such jurisdictional facilities pursuant to the terms of leases, and, if the WTE Holdings interests are acquired by Wheelabrator Technologies, the applicable sale-leaseback financing structures with respect to certain projects may be unwound or otherwise altered, such that in any event Granite and/or its affiliates will have ownership and control of those jurisdictional facilities.

Wheelabrator Technologies has a principal business of the development, ownership, and operation of trash-to-energy and other waste-fuel and gas-fired qualifying facilities under the Public Utility Regulatory Policies Act of 1978. Wheelabrator owns or controls approximately 241.7 MW of generation in the ISO New England (ISO-NE) market, 240.3 MW in the PJM Interconnection market, 86.5 MW in the New York Independent System Operator market, 93.4 MW in the California Independent System Operator market, 53.7 MW in the Florida Municipal Power Pool balancing authority area (BAA), and 66 MW in the Florida Power & Light BAA.

Wheelabrator Technologies is a wholly-owned subsidiary of Waste Management Inc., a publicly traded company. Granite is controlled by equity investor Energy Capital Partners.

Waste Management had announced July 29 that it has agreed to sell Wheelabrator Technologies to an affiliate of Energy Capital Partners for $1.94bn in cash. Wheelabrator owns or operates 17 waste-to-energy facilities and four independent power facilities in the U.S. that process over 7.5 million tons of waste and have a combined generating capacity of 853 MW. It also has four ash monofill landfills, three transfer stations and an ongoing development and construction project in the United Kingdom.

In conjunction with the sale, Waste Management will enter into a long-term agreement to supply waste to certain WTI facilities upon closing.

“This transaction aligns with our goal of driving shareholder value by maximizing our focus on our core business and reducing earnings volatility related to electricity sales,” said David Steiner, President and CEO of Waste Management, in that July 29 announcement. “We look forward to a long-term partnership with ECP through our waste supply agreement.”

“ECP is excited about our acquisition of Wheelabrator given its excellent operating track record of critical assets, and talented and entrepreneurial employees,” said Tyler Reeder, a Partner in Energy Capital Partners. “We believe Waste Management’s strong waste supply capabilities well complement ECP’s deep experience in power generation; and we look forward to continuing to provide Wheelabrator customers and partners with the same continued excellent service they have enjoyed under Waste Management’s ownership.”

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.