Texas administrative judge rules in Rattlesnake Wind I case

An administrative law judge at the Texas Public Utility Commission on May 12 rejected on a technical basis part of a March 30 application from Rattlesnake Wind I LLC related to an ownership change.

Invenergy Investment Co. LLC indirectly owns 100% of the equity interests in Rattlesnake, which is developing a 207.2-MW wind project in Glassock County, Texas. Rattlesnake’s facility will be interconnected to the Electric Reliability Council of Texas through facilities that will be operated by Wind Energy Transmission Texas LLC.

Rattlesnake sought approval for the issuance of passive equity interests in Rattlesnake to two entities, EFS Renewable Holdings LLC and BAL Investment & Advisory Inc. (collectively called the “Investors”). Rattlesnake will issue Class A passive equity interests in Rattlesnake to the Investors, and will convert Rattlesnake’s current equity interests into Class B managing equity interests. The state’s Public Utility Regulatory Act (PURA) law requires an owner of electric generation facilities that offers electricity for sale in the state and proposes to merge, consolidate or otherwise become affiliated with another owner of electric generation facilities that offers electricity for sale in this state to obtain approval of the commission before closing if the electricity offered for sale in the power region by the merged, consolidated, or affiliated entity will exceed 1% of the total electricity for sale in the power region.

Rattlesnake stated that after the transaction is complete, Rattlesnake together with its affiliates and Investors, will directly or indirectly own approximately 1.75% of the total installed generation capacity in ERCOT. Therefore, Rattlesnake filed this application. Rattlesnake asked that the following question be certified to the commission: “In an instance where an entity owning electric generation facilities in Texas proposes to sell, and a third-party investor wishes to purchase, private equity shares in the entity where no right to manage or control the entity owning the electric generation facilities in Texas is sold or purchased (other than consent or approval rights granted to passive investors to preserve the value of their investments, which in any event do not include the right to dispatch the electric generation facilities or determine at what price power is sold), is the Commission required to approve such a transaction under the provisions of PURA § 39.158?”

Rattlesnake stated that as Class A passive investors, the Investors will have no right to exert management or operational control over the project. As such, Rattlesnake posits that a filing under PURA § 39.158 is not necessary in this instance. Rattlesnake is seeking a determination whether the acquisition of a passive equity interest in electric generation facilities results in an “affiliation” that requires the approval of the Commission prior to the closing of such a transaction. State code vests the presiding officer with authority to decide whether certification of an issue to the commission is appropriate. In this docket the commission must determine whether the transaction meets the standards in PURA § 39.154, thus qualifying for approval under PURA § 39.158.

“The issue Rattlesnake has identified is not dispositive of the ultimate finding required under PURA § 39.154 to obtain approval of the application,” said the May 11 ruling from the administrative law judge. “The issue raised by Rattlesnake is not appropriate for certification under 16 TAC § 22.127 in the instant docket. For these reasons, the motion for certification is denied.”

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.