The Federal Energy Regulatory Commission on March 16 approved Canadian Solar to take over independent power developer Recurrent Energy LLC.
On Feb. 10, RE Columbia LLC, Recurrent Energy LLC and Canadian Solar sought authorization for the disposition of a portion of the upstream ownership interests in Recurrent by an upstream owner, Sharp US Holding Inc., to Canadian Solar Energy Acquisition Co., a wholly owned subsidiary of Canadian Solar.
Recurrent is a wholly owned subsidiary of Sharp U.S., which in turn is wholly owned by Sharp Corp., a Japanese corporation. Recurrent owns interests in entities which include nine solar projects with a combined capacity of 6 MW in the California Independent System Operator (CAISO) footprint and a 5-MW solar facility in the PJM Interconnection footprint. RE Columbia owns and operates an approximately eight mile generation tie-line and related interconnection facilities in Kern County, California.
RE Columbia is directly owned by the following entities: 45% RE Camelot LLC; 20% RE Clearwater LLC; 20% by RE Yakima LLC; and 15% by RE Columbia Two LLC. Each of Clearwater and Yakima is wholly owned by Recurrent. Each of Camelot and Columbia Two is wholly owned by Dominion Solar Holdings, Inc. an indirect wholly owned subsidiary of Dominion Resources (NYSE: D). Recurrent owns an indirect 5% ownership interest in each of RE Mckenzie 1 LLC; RE Mckenzie 2 LLC; RE Mckenzie 3 LLC; RE Mckenzie 4 LLC; RE Mckenzie 5 LLC; and RE Mckenzie 6 LLC, each of which owns a 5-MW solar facility within the Sacramento Municipal Utility District balancing authority area.
Canadian Solar is a vertically-integrated provider of ingot, wafer, solar cell, solar module, and other solar applications. Canadian Solar is an indirect minority owner of a number of qualifying facilities within the United States. Applicants told FERC that, to the extent Canadian Solar owns or controls, directly or indirectly, any inputs to power production, these would include a portfolio of late stage solar projects under development including land rights that total approximately 164 MW.
Under the now-approved transaction, Canadian Solar will acquire all of Sharp U.S.’ ownership interest in Recurrent, and accordingly, acquire 40% indirect interest in RE Columbia.
Canadian Solar (NASDAQ: CSIQ) had announced on Feb. 2 that it had entered into a definitive agreement with Sharp Corp. (TSE: 6753) to acquire Recurrent Energy for about $265m. The acquisition of Recurrent will increase Canadian Solar’s total solar project pipeline by approximately 4 GW to 8.5 GW, and its late-stage project pipeline by approximately 1 GW to 2.4 GW. Located in California and Texas, Recurrent’s 1-GW late-stage pipeline is one of the largest utility-scale project portfolios scheduled to be built prior to the ITC expiration in 2016, and represents an estimated revenue opportunity of at least $2.3bn for Canadian Solar under a build and sell business model.