FERC okays sale of Lakeside power plant interests by American Securities

The Federal Energy Regulatory Commission on Jan. 7 approved the sale of three power plant interests in New York State and Pennsylvania by one equity investor to another.

On Nov. 26, Lakeside Energy LLC, Lakeside Generation LLC, Lakeside New York LLC, Lakeside Hazelton LLC, Lakeside Beaver Falls LLC, Lakeside Syracuse LLC and Hazleton Generation LLC (collectively the Lakeside Entities) plus NEP Holdco 1 LLC, filed an application requesting commission authorization for the disposition of jurisdictional facilities. Specifically, NEP Holdco will acquire from Lakeside Energy allof the outstanding membership interests in Lakeside Generation.

Lakeside Energy is a private equity firm that is in the business of acquiring, financing, owning, and operating energy companies and assets in North America. Lakeside Energy is owned by American Securities Partners IV LP and other affiliated funds managed by private equity firm American Securities LLC. The remaining Lakeside Entities are Delaware limited liability companies whose corporate parent is Lakeside Energy.

Lakeside Beaver Falls, Lakeside Syracuse and Hazleton Generation, referred to as the Lakeside Generators, are exempt wholesale generators with market-based rate authority.

  • Lakeside Beaver Falls owns and operates an approximately 108 MW combined-cycle facility located in Beaver Falls, New York; and
  • Lakeside Syracuse owns and operates an approximately 103 MW combined-cycle facility located in Solvay, New York.

Both the 108 MW and 103 MW facilities are situated within the New York Independent System Operator balancing authority area (NYISO BAA).

Hazleton Generation owns and operates an approximately 158 MW natural gas- and oil-fired facility located in Luzerne County, Pennsylvania, which is within the PJM Interconnection BAA.

NEP Holdco is a newly-formed Delaware limited liability company. The direct and indirect owners of NEP Holdco are considering two structures through which to hold the Lakeside Entities, except Lakeside Energy. Ultimately, applicants state, all of the indirect owners will be the same, although their ownership interest percentages may vary.

In Structure 1, NEP Holdco is a wholly-owned subsidiary of SEIF II U.S. Partnership Holdings II LLC (SEIF II). In Structure 2, NEP Holdco will be wholly-owned by a NEP Holdco holding company that has not yet been formed, NEP Parent. NEP Parent will be at least 50% owned by SEIF II, and at most 50% owned by another company that has not yet been formed, Co-Invest LLC. SEIF II and Co-Invest will collectively own 100% of NEP Parent. NEP Parent will have no other direct owners besides SEIF II and Co-Invest LLC.

SEIF-II and Co-Invest are indirect subsidiaries of funds managed and controlled by Starwood Energy Group Global LLC, a private equity fund. Starwood solely manages certain equity funds that invest in power projects in the United States.

Upon consummation of the proposed transaction, the Lakeside Generators will be wholly owned, indirect subsidiaries of NEP Holdco. Applicants stated that neither NEP Holdco nor any of its affiliates currently own or control any generation capacity within the NYISO and PJM BAAs. Applicants thus assert that there is no overlap in generation in those markets. Applicants noted that NEP Holdco is affiliated with 76.5 MW of capacity within the NYISO’s first tier market, the ISO New England BAA. However, applicants assert that the combined capacity of the Lakeside Generators and NEP Holdco in the NYISO and its first tier markets comprises under 1% of the total installed generating capacity in the NYISO BAA.

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.