FERC okays sale of 25% of CPV Maryland to Japan-based company

The Federal Energy Regulatory Commission on May 28 approved a change in control of 25% of CPV Maryland LLC, the Competitive Power Ventures affiliate that is developing a 725-MW, gas-fired power project near Washington DC.

On April 27, CPV Maryland, MC St. Charles LLC, OG St. Charles LLC and Osaka Gas USA Corp. (OGUSA) submitted an application requesting authorization for a transaction whereby OG St. Charles will acquire a 25% equity interest in CPV Maryland from MC St. Charles. OG St. Charles will be managed by its sole member, OGUSA. OG St. Charles’ only business will be to hold the membership interest in CPV Maryland and that, upon consummation of the proposed transaction, OGUSA will indirectly own a 25% equity interest in CPV Maryland.

CPV Maryland is constructing, and will own and operate, a 725-MW combined cycle, gas-fired facility (CPV Maryland Facility), along with limited interconnection facilities, to be located in Charles County, Maryland. The CPV Maryland Facility will be interconnected with transmission facilities owned by Potomac Electric Power and operated by PJM Interconnection.

CPV Maryland is currently owned:

  • 25% by CPV Maryland Holding Co. LLC (CPV Maryland Holding), which is 100% indirectly owned by Competitive Power Ventures Holdings LLC (CPV);
  • 25% by Toyota Tsusho St. Charles LLC (TT St. Charles), which is 100% indirectly owned by Toyota Tsusho Corporation (TTC); and
  • 50% owned by MC St. Charles, which is 100% indirectly owned by Marubeni Corp.

A related company, CPV Shore LLC, is developing and will construct, own and operate a 725-MW combined cycle, gas-fired facility and interconnection facilities that will be interconnected with the transmission facilities owned by Jersey Central Power & Light and operated by PJM. 

Marubeni is a company organized under the laws of Japan and is one of Japan’s largest, most diversified and oldest trading companies. Other than its 50% indirect ownership interest in MC St. Charles, Marubeni and its affiliates do not own or control any electric generation or transmission assets or inputs to electric power production in any relevant PJM markets.

OGUSA is an indirect wholly owned subsidiary of Osaka Gas Co. Ltd., which is a company organized under the laws of Japan. Osaka Gas Ltd. is a leading energy supplier in Japan with a history going back more than a century. OGUSA owns a 20% indirect interest in Lakewood Cogeneration LP, which has a 239-MW cogeneration facility. Lakewood is interconnected with the transmission system that is owned by Jersey City Central Power & Light but is operated by PJM.

The now-approved transaction involves the transfer from MC St. Charles to OG St. Charles of 25% of the equity interest in CPV Maryland. Once the proposed transaction is consummated, OG St. Charles will own 25% of CPV Maryland and MC St. Charles will own 25% of CPV Maryland.

“With regard to horizontal market power concerns, the Applicants assert that, upon consummation of the Proposed Transaction and commencement of operations of the CPV Maryland Facility and the CPV Shore Facility, CPV Maryland and its affiliates would have a generation capacity of 1,450 MW,” FERC noted in the approval order. “Applicants state that this is 1.6 percent of the 88,281 MW of total capacity in the AP South submarket in PJM. Applicants state that the Proposed Transaction will result in a new affiliation by CPV Maryland in AP South with Lakewood’s 239 MW of capacity in New Jersey. OGUSA’s ownership share of Lakewood is 20 percent. According to Applicants, conservatively assuming that all of Lakewood’s capacity should be attributed to OGUSA because of its 20 percent interest in Lakewood, the 239 MW represents 0.27 percent of the total capacity in AP South, which, Applicants assert, is de minimis. Upon consummation of the Proposed Transaction and commencement of operations of the CPV Maryland Facility, the combined capacity of Applicants and their affiliates in AP South, including Lakewood, will be 1,689 MW which is, according to Applicants, 1.9 percent of all AP South capacity and a de minimis amount.”

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.