FERC okays sale of landfill gas power plant interests to Aria Energy

The Federal Energy Regulatory Commission on Jan. 7 approved a transaction that is a key to creating a new publicly-traded company, Aria Energy Corp., specializing in power plants fired by landfill gas.

On Dec. 1, Sunshine Gas Producers LLC, Innovative Energy Systems LLC and Seneca Energy II LLC sought commission authorization for the disposition of jurisdictional facilities resulting from the initial issuance and sale of voting securities in a newly-established indirect partial owner, to be named Aria Energy, to dispersed purchasers.

This proposed transaction is related to a larger sale of generating projects that includes the applicants’ facilities, all of which are qualifying facilities (QFs) under the Public Utility Regulatory Policies Act of 1978, as amended. The specific entities involved in the larger transaction include the applicants and interests in the QFs in the sale portfolio.

Applicants are indirect subsidiaries of funds managed and controlled by EIF Management LLC, the sole manager of certain private equity funds that invest in power projects in the United States. EIF currently holds its interests in the applicants through EIF Renewables Energy Holdings LLC. EIF Renewables indirectly owns all of the outstanding interests in Innovative and Seneca, and indirectly owns the Innovative and Seneca-affiliated projects and indirectly assumed operational control over the Innovative O&M Projects.

Sunshine Gas owns the Sunshine Gas QF, an approximately 23.63 MW landfill gas facility located in the California Independent System Operator market. All output from the facility will be sold to Pacific Gas & Electric pursuant to a long-term power sales agreement. Applicants state that Sunshine Gas is jointly owned by DTE Biomass Energy and by EIF. DTE Biomass is the managing partner of Sunshine Gas, and is an indirect, wholly-owned subsidiary of DTE Energy (NYSE: DTE).

Innovative does not directly own electric generation or transmission assets or facilities or any input to the production of electricity. Innovative 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 (NYISO) and facilitating the sale of certain unforced electric power production capacity of a subset of the same QFs. In addition, Innovative purchases and resells the energy associated with the Innovative O&M Projects to Seneca. Innovative owns all of the outstanding equity interests in entities whose total generating capacity amounts to 55.2 MW in the NYISO market. Each of these entities owns a QF electric generating facility.

Applicants state that the proposed transaction entails an initial public offering of approximately 35% of EIF’s current voting equity interests in Aria, in the form of the share capital of Aria, to the general public, with anticipated sales to the general public of voting interests in Aria anticipated to reflect roughly half of the indirect voting interests in the applicants.

Innovative provides O&M and related services to three non-affiliated electric facilities: Hyland, a 4.8-MW landfill gas generating facility in the Town of Angelica, NY; Clinton County, a 6.4-MW landfill gas facility in the Town of Schuyler Falls, NY; and Chautauqua, a 6.4-MW landfill gas facility in the Town of Ellery, NY (collectively called the Innovative O&M Projects).

Aria Energy announced Dec. 1 that it has confidentially submitted a draft registration statement on Form S-1 to the Securities and Exchange Commission (SEC) relating to the proposed initial public offering of its common stock. The initial public offering is expected to commence after the SEC completes its review process, subject to market and other conditions.

Headquartered in Novi, Michigan, Aria Energy said it provides baseload renewable energy to utilities and other customers across the United States. Aria Energy owns and/or operates a diversified portfolio of renewable energy projects across 16 states, collectively representing 265.9 MW-equivalent of baseload renewable energy capacity. The majority owners of Aria Energy are certain private equity funds managed by Energy Investors Funds.

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.