CPV Sentinel LLC, which owns a power plant in California, on Sept. 23 applied with the Federal Energy Regulatory Commission for approval of a change in the indirect ownership of the company.
Under this deal, Competitive Power Ventures Holdings LLC (CPV Holdings) will transfer all of its membership interests in CPV Power Development Inc. (CPV PDI) (which indirectly holds a 25% interest in CPV Sentinel) to PG Coachella Power Holdings Inc. (PG Coachella). PG Coachella is a newly formed portfolio company owned by investment vehicles advised or managed by Partners Group (USA) Inc. or its affiliates (called the “PG Investment Vehicles”), which is part of the Partners Group investment family (Partners Group).
CPV Sentinel owns and operates an 800-MW natural gas-fired facility and related interconnection facilities located in Riverside County, California. The facility is interconnected to the transmission system owned by Southern California Edison (SCE) and operated by the California Independent System Operator (CAISO). All of the output of the facility is sold to SCE under a long-term power sale agreement.
CPV Sentinel is owned 50% by Sentinel Power Holdings LLC and 50% by Diamond Voltage Holdings LLC. Sentinel Power Holdings is owned 50% by CPV Sentinel Holding LLC and 50% by Diamond Sentinel LLC. Diamond Voltage is owned indirectly 50% by Diamond Sentinel and 50% by Voltage Finance LLC.
This proposed transaction relates only to the 50% membership interest of Sentinel Power Holdings owned by CPV Sentinel Holding. Currently, CPV Sentinel Holding is wholly owned by CPV PDI, which is a wholly owned subsidiary of CPV Holdings. 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 CPV Holdings.
For purposes of the commission’s review of the proposed transaction, the relevant geographic market is the CAISO market, because that is where the facility is located. CPV Sentinel is affiliated with approximately 432 MW of generation in the CAISO market: Indigo Generation LLC’s 138 MW generation facility; Larkspur Energy LLC’s 94 MW generation facility; and Mariposa Energy LLC’s 200 MW generation facility.
Partners Group is a global private markets investment management firm with interests in private infrastructure, private equity, private real estate and private debt. The firm manages a broad range of customized portfolios for institutional investors. Partners Group is headquartered in Zug, Switzerland, and has offices in San Francisco, Houston, New York, and other locations throughout the world.
PG Investment Vehicles are not affiliated with any companies that own or operate generation facilities. PG Investment Vehicles own a majority interest in Fermaca, which owns and operates natural gas pipelines in Mexico. Fermaca recently entered into a joint venture with ONEOK to develop a natural gas pipeline, known as the Roadrunner Pipeline, extending from the Permian Basin in West Texas into Mexico. The Roadrunner Pipeline is expected to achieve commercial operation in 2016.
Under this deal, CPV Holdings will transfer all of its capital stock in CPV PDI to PG Coachella. As a result, PG Investment Vehicles will indirectly hold all of the issued and outstanding capital stock in CPV PDI, indirectly hold all of the membership interests in CPV Sentinel Holding, indirectly hold 50% of the membership interests in Sentinel Power Holdings and indirectly hold 25% of the membership interests in CPV Sentinel. Warburg Pincus will no longer hold any indirect interests in CPV Sentinel.