New York PSC approves sale of two power plants to Starwood affiliate

On Jan. 13, the New York State Public Service Commission approved the sale of power plant interests by American Securities Partners IV LP to an affiliate of equity investor Starwood Energy Group Global LLC.

On Nov. 26, 2014, NEP Holdco 1 LLC and Lakeside Energy LLC and its subsidiaries – Lakeside Generation LLC, Lakeside New York LLC, Lakeside Beaver Falls LLC and Lakeside Syracuse LLC – requested issuance of an expedited order approving the transfer of all of the membership interests of Lakeside Generation from Lakeside Energy to NEP Holdco under the state Public Service Law.

The petitioners also requested that the lightened regulatory regime currently applied to Lakeside Syracuse and Lakeside Beaver Falls continue to apply to those entities under the ownership of NEP Holdco.

  • Lakeside Beaver Falls owns and operates a gas-fired, 108-MW facility in Beaver Falls, and also supplies steam service to two nearby retail customers, Interface Solutions Inc. and Omniafiltra LLC.
  • Lakeside Syracuse owns and operates a gas-fired, 103-MW facility in Solvay, New York.

Both Lakeside Beaver Falls and Lakeside Syracuse are wholly owned indirectly by Lakeside Generation. The petitioners stated that NEP Holdco and its affiliates currently own no generation facilities in New York.

Lakeside Energy is a private equity firm owned by American Securities Partners IV LP. Lakeside Generation’s wholly-owned subsidiary, Lakeside Hazleton LLC, owns an approximately 158-MW, oil-and gas-fired facility located in Pennsylvania. Other than Lakeside Beaver Falls, Lakeside Syracuse, and Lakeside Hazleton, Lakeside Energy and Lakeside Generation are not affiliated with any entity that owns or controls generation or transmission facilities.

NEP Holdco is a special-purpose limited liability company created for the purpose of facilitating the proposed transaction. NEP Holdco will be owned indirectly through funds entirely managed and controlled by Starwood Energy Group Global LLC. The petitioners noted that one investor in the Starwood funds also holds an approximately 12.5% passive limited partner interest in an indirect owner of an approximately 942-MW facility interconnected to both the New York Independent System Operator (NYISO) and PJM Interconnection markets. As this investment interest is passive, the petitioners claim, no management, direction or control over that facility can be exercised through the interest. NEP Holdco is also affiliated with ownership of a 250-MW wind facility currently under construction in PJM and a 76.5-MW biomass-fueled facility located in the ISO New England market.

Said the Jan. 13 PSC approval: “The proposed ownership interest transaction does not pose the potential for the exercise of horizontal market power. Because NEP Holdco currently does not own or control any generation facilities in New York, its acquisition of Lakeside Generation will have no effect on market concentration in New York.”

The New York commission added: “The proposed transaction does not pose the potential for the exercise of vertical market power.”

The Federal Energy Regulatory Commission on Jan. 7 approved the sale of these two power plant interests in New York State, plus the one in Pennsylvania. 

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.