The Federal Energy Regulatory Commission on March 25 approved a transaction involving the sale of managing solar project interests to an affiliate of Southern Power Co.
On Feb. 26, Blackwell Solar LLC and Lost Hills Solar LLC sought FERC authorization for the acquisition by Southern Renewable Partnerships LLC (SRP), a wholly owned subsidiary of Southern Power Co. (SPC), of 100% of the managing Class A membership interests in Lost Hills Blackwell Holdings LLC (LHB Holdings) from NextLight Renewable Power LLC.
Blackwell and Lost Hills are exempt wholesale generators (EWGs) with market-based rate authority. Blackwell owns a 12-MW (ac) photovoltaic plant (Blackwell Facility) located in Kern County, California. Lost Hills owns a 20-MW (ac) photovoltaic plant (Lost Hills Facility), also located in Kern County, California. Applicants stated that these facilities are expected to begin commercial operation during the second quarter of 2015.
The Blackwell Facility is interconnected at 12 kV and the Lost Hills Facility is interconnected at 70 kV, each within the California Independent System Operator (CAISO) market. Each facility’s output is contractually committed for a period of approximately 29 years through overlapping power purchase agreements (PPAs). The first of the overlapping PPAs are 10-year PPAs for each facility with the City of Roseville, California, and the second of the overlapping PPAs are 25-year PPAs for each facility with Pacific Gas and Electric (PG&E).
The applicants, LHB Holdings, and NextLight are indirect, wholly owned subsidiaries of First Solar. First Solar is engaged in the manufacturing of solar photovoltaic modules and the developing of solar power generating facilities through project companies. Applicants told GERC that First Solar sells the generating projects it develops to purchasers and provides operation and maintenance services for the facilities under the direction of the new owners.
SRP, a wholly owned indirect subsidiary of SPC, has been formed for the purpose of acquiring and holding, directly or indirectly, membership interests in renewable energy projects. SPC is a subsidiary of Southern Co. (NYSE: SO).
Regarding SPC’s interests in facilities located in the CAISO market or in first-tier markets, the applicants stated that such interests are held via Southern Turner Renewable Energy (STRE), which is a strategic alliance between Turner Renewable Energy LLC and Southern Renewable Energy (SRE) to pursue development and investment in solar projects. STRE’s assets currently include seven solar generation facilities, all of which are fully committed to unaffiliated third parties under long-term PPAs. Two of these facilities are located within the CAISO market.
Under this transaction, NextLight will sell all of the non-passive Class A ownership interests in LHB Holdings to SRP. Concurrently with the transfer of the Class A interests to SRP, 100% of the passive Class B membership interests in LHB Holdings will be transferred to FSAM Lost Hills Blackwell Holdings LLC (FSAM), which upon formation will become an indirect wholly owned subsidiary of First Solar. Applicants state that the transfer of the passive Class B membership interests in LHB Holdings from NextLight to FSAM will be effectuated under an internal corporate reorganization of First Solar subsidiaries.