The Federal Energy Regulatory Commission on May 8 approved a change in ownership related to several companies, including CPV Maryland LLC, which is developing a new gas-fired power plant in Maryland near Washington DC.
On March 31, CPV Maryland LLC, CPV Shore LLC, CPV Keenan II Renewable Energy Co. LLC, CPV Biomass Holdings LLC and Benson Power LLC sought FERC authorization for the transfer of indirect membership interests in these companies to GIP II CPV Holdings Partnership LP (GIP II CPV Holdings), GIP II CPV Holdings Partnership 2 LP, GIP II CPV Holdings Partnership 3 LP and GIP II CPV Holdings Partnership 4 LP. These GIP II CPV Holdcos will be indirect subsidiaries of Global Infrastructure Partners II-B Feeder Fund LP, Global Infrastructure Partners II-A LP, Global Infrastructure Partners II-C LP, GIP II-C Eagle AIV LP, Global Infrastructure Partners II-D1 LP and GIP II Friends & Family Fund LP. The proposed transaction will be partly effectuated pursuant to an internal corporate reorganization of the upstream ownership of the applicant companies.
Warburg Pincus Private Equity IX LP and Warburg Pincus Equity Partners Liquidating Trust have a collective ownership interest of 95.2% of the voting shares in Competitive Power Ventures Holdings LLC. CPV Holdings, through its subsidiaries Competitive Power Ventures Inc. (CPV Inc.), CPV Power Development Inc. (CPV PDI) and CPV Renewable Energy Co. Inc. (CPV REC) develops, owns, and operates electric generating facilities, such as applicants’ generating facilities, and provides asset management services. CPV Maryland and CPV Shore are partly owned subsidiaries of CPV PDI; CPV Keenan II is a subsidiary of CPV REC; and CPV Biomass, which wholly owns Benson Power, is a wholly-owned subsidiary of CPV Inc.
- CPV Maryland is an exempt wholesale generator (EWG) with market-based rate authorization. CPV Maryland is developing and will own and operate a 725-MW combined-cycle gas-fired facility and interconnection facilities that will be interconnected with the transmission facilities owned by the Potomac Electric Power and operated by the PJM Interconnection.
- CPV Shore is an EWG with market-based rate authorization. CPV Shore is developing and will own and operate a 725-MW combined cycle gas-fired plant and interconnection facilities that will be interconnected with the transmission facilities owned by Jersey Central Power & Light and operated by PJM.
- CPV Keenan II is an EWG with market-based rate authorization. CPV Keenan II owns and operates a 151.8 MW wind facility that is interconnected with the transmission system owned by Oklahoma Gas and Electric and operated by the Southwest Power Pool. CPV Keenan II sells the entire output of its facility under a long-term power purchase agreement (PPA) with OG&E.
- CPV Biomass has recently received a market-based rate authorization and has filed a notice of self-certification for EWG status. CPV Biomass is currently the sole owner of Benson Power and, when Benson Power acquires a 64-MW poultry-litter biomass-fueled facility located in Benson, Minnesota, CPV Biomass will hold 100% of the controlling Class A interests in Benson Power and will become the managing member of Benson Power. This facility is interconnected to the transmission system owned by Great River Energy and operated by the Midcontinent Independent System Operator. The entire output of the facility is sold under a long-term contract with Northern States Power d/b/a/ Xcel Energy.
The GIP II Funds are independent funds organized as limited partnerships that invest in infrastructure assets. Global Infrastructure Management LLC (GIM) is the manager of the GIP II Funds, and Global Infrastructure Management Participation LLC is the sole member of GIM. The GIP II Funds do not own or control any generating facilities, transmission facilities or other inputs to production, such as fuel supplies or fuel delivery, in the United States.
Under the proposed transaction, there are four steps:
- (1) – CPV PDI will form a new wholly owned limited liability company subsidiary, CPV Newco, that will serve as the general partner of a newly formed limited partnership CPV New LP. As general partner, CPV Newco will hold all of the general partner interests representing 0.2% of the economic interest in CPV New LP, and CPV PDI will hold all of the limited partner interests representing 99.8% of the economic interest in CPV New LP.
- (2) – CPV PDI will transfer to CPV New LP (i) its 100% membership interest in CPV Maryland Investment, (ii) its 99% equity interest in CPV Maryland Holding II, and (iii) its 100% equity interest in CPV Shore Investment.
- (3) – CPV PDI will transfer its 100% membership interest in CPV Newco and its 100% limited partner interest in CPV New LP to the GIP II CPV Holdcos; and
- (4) – CPV Holdings will transfer its 100% equity interests in CPV Inc. and CPV REC to the GIP II CPV Holdcos.
Following this transaction, GIP II Funds will indirectly hold: 25% of the ownership interests in CPV Maryland; 18.75% of the ownership interests in CPV Shore; 100% of the controlling Class B membership interest in CPV Keenan II; and 100% of the ownership interests in CPV Biomass, which will continue to hold ownership interest in Benson Power. As a result of this transaction, Warburg Pincus Private Equity and Warburg Pincus Equity Partner Liquidating Trust will no longer hold an interest in the applicants.