EIF Management companies seek FERC approval for partial equity sale

Sunshine Gas Producers LLC, Innovative Energy Systems LLC (IES) and Seneca Energy II LLC on Dec. 1 jointly requested Federal Energy Regulatory Commission authorization for the indirect disposition of jurisdictional facilities resulting from the initial issuance and sale of voting securities in a newly-established indirect partial owner to widely dispersed purchasers.

A new partial, indirect owner of interests in the applicant companies, to be named Aria Energy Corp., will be created, and Aria is separately to submit to the U.S. Securities and Exchange Commission (SEC) the documents and materials necessary to consummate the transactions, including a related initial public offering of securities in Aria. In the proposed transaction, private equity funds that are subject to the exclusive management and control of EIF Management LLC will transfer about 35% of the indirect voting equity interests that EIF currently holds in the applicants to Aria, with approximately 50% of the indirect voting equity interests in Aria ultimately offered for sale to the general public.

Assuming the transfer of approximately 35% of its interests, EIF would initially retain approximately 65% of the indirect interests in the applicants, and will continue, after consummation, to exercise of day-to-day control over them. EIF also expects to offer additiona lindirect interests in the applicants, which collectively are expected to involve approximately half of the indirect voting equity interests in the applicants to be widely dispersed, but with EIF remaining affiliated with the applicants and ultimately exercising day-to-day control over them.

The proposed transaction involves a larger portfolio of generating projects that includes the applicants’ facilities as a subset. The other facilities, though, are qualifying facilities (QFs) that are too small to be included in the Dec. 1 application.

  • Sunshine Gas owns the Sunshine Gas QF, an approximately 23.63-MW landfill gas facility located in Sylmar, California. All output from the facility will be sold to Pacific Gas & Electric under a long-term power sales agreement. Sunshine Gas is jointly owned by DTE Biomass Energy, which is part of DTE Energy (NYSE: DTE), and by EIF. DTE Biomass is the managing partner of Sunshine Gas.
  • IES is primarily engaged in the business of scheduling the energy of indirectly owned and affiliated QFs into the energy markets administered by the New York Independent System Operator and facilitating the sale of certain unforced electric power production capacity (UCAP) of a subset of the same QFs. IES also purchases and resells the energy associated with the IES O&M Projects to Seneca Energy II. IES owns all of the outstanding equity interests in the following entities, each of which owns a QF facility (collectively, the “IES Projects”): Innovative/Colonie LLC, a roughly 4.8-MW landfill gas facility in Cohoes, NY.; Innovative/DANC LLC, an approximately 6.4-MW landfill gas facility in Rodman, N.Y.; and Innovative/Fulton LLC, an approximately 3.2-MW landfill gas facility in Johnstown, N.Y. IES also owns 100% of the outstanding equity interests in: Modern Innovative Energy LLC, which owns an approximately 6.4-MW landfill gas facility located in Youngstown, N.Y., and Model City Energy LLC, which owns an approximately 5.6MW landfill gas facility also located in Youngstown, N.Y.
  • Seneca Energy II owns two generating facilities: Seneca Falls Project, an approximately 17.6-MW landfill gas facility in Seneca Falls, N.Y.; and Ontario County Project, an approximately 11.2-MW landfill gas facility in Stanley, N.Y.
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.