SunEdison (NYSE: SUNE) announced Aug. 12 that it has signed a definitive agreement with Dominion Resources (NYSE: D), one of the nation’s largest producers and transporters of energy, establishing a joint venture (JV) for Four Brothers, a 420-MW (dc)/320-MW (ac) solar project in Utah.
The SunEdison-developed project is now under construction and fully financed with an expected commercial operation date in mid-2016. The Four Brothers project is contracted under long-term power purchase agreements for 20 years with PacifiCorp, a subsidiary of Berkshire Hathaway Energy.
Under the terms of the JV, Dominion will invest approximately $500 million to acquire 50% of the cash equity and 99% of the tax equity in Four Brothers, including funding of construction. SunEdison will contribute the remaining portion of the capital required to complete the project, which it has fully financed through a $150 million four-year term loan with Deutsche Bank. The total $650 million financing package fully funds the project for completion and long-term ownership.
Four Brothers generates approximately $40 million dollars of unlevered cash available for distribution (CAFD) to Dominion and SunEdison. SunEdison’s 50% interest in the Four Brothers project is on the Call Right Projects List for SunEdison’s yieldco affiliate, TerraForm Power (Nasdaq: TERP).
“We are very pleased to establish a great strategic partnership with Dominion, one of the nation’s largest and most innovative producers of energy in jointly owning the Four Brother project,” said Paul Gaynor, executive vice president of SunEdison EMEA & Americas. “From a financial perspective, the Dominion partnership demonstrates the quality of our project and provides SunEdison and TerraForm Power with a complete solution for the construction and permanent financing of this 420 MW solar facility.”
The Utah Public Service Commission in October 2014 approved Power Purchase Agreements (PPAs) between PacifiCorp and the project companies for Four Brothers; Enterprise Solar LLC, Escalante Solar I LLC, Escalante Solar II LLC and Escalante Solar III LLC. The applications filed in July 2014 with the Utah commission covered:
- A PPA between Enterprise Solar and PacifiCorp covering an 80-MW nameplate (ac) solar photovoltaic facility. The site is an approximately 650-acre area located near the Town of Enterprise, Utah.
- A PPA between PacifiCorp and Escalante Solar I. The agreement provides for the sale to PacifiCorp of energy to be generated by Escalante I, an 80-MW nameplate (ac) solar facility. This is on an approximately 600-acre site located near the Town of Milford, Utah.
- A PPA between PacifiCorp and Escalante Solar II for an 80-MW nameplate (ac) photovoltaic facility. The site is an approximately 600-acre area located near the Town of Milford.
- PacifiCorp and Escalante Solar III have a PPA for an 80-MW nameplate (ac) facility. The site is an approximately 700-acre parcel located near the Town of Milford.