The Federal Energy Regulatory Commission on Sept. 21 approved the sale of 50% of a gas-fired cogeneration plant in New Jersey by an affiliate of General Electric (NYSE: GE).
On Aug. 7, GE’s Aircraft Services Corp., plus East Coast Power Linden Holding LLC (ECP Linden Holding) and Cogen Technologies Linden Venture LP (Linden Venture), applied for commission authorization for a transaction whereby Aircraft Services will sell its 50% ownership interest in Linden Cogen Holdings LLC (Linden Holdings) to AEIF Linden SPV LLC.
Linden Holdings is the indirect owner of a 974-MW cogeneration facility located in Linden, New Jersey (Linden Facility). The Linden Facility is comprised of units 1-5 (Linden 1-5), which are owned by Linden Venture and have a combined nameplate capacity of approximately 761 MW, and Unit 6 (Linden 6), which is owned by ECP Linden Holdings and has a nameplate capacity of approximately 213 MW.
Approximately 645 MW of the output of Linden 1-5 is sold to Consolidated Edison Co. of New York under a long-term power purchase agreement that expires April 30, 2017, while the remaining output of Linden 1-5 is sold into the New York Independent System Operator (NYISO) market or pursuant to bilateral agreements. Similarly, the output of Linden 6 is sold to Phillips 66 Co.’s Bayway refinery under a long-term requirement agreement that expires in 2032. Available excess energy and capacity from Linden 6 is sold in the PJM Interconnection market or pursuant to bilateral arrangements.
Linden 6 is not electrically connected to the 345-kV line that connects Linden 1-5 to NYISO, such that Linden 1-5 is interconnected to NYISO-controlled facilities while Linden 6 is interconnected to PJM.
Aircraft Services is a wholly owned, indirect subsidiary of General Electric Capital Corp., which in turn is a wholly owned subsidiary of General Electric. Aircraft Services currently owns a 50% interest in Linden Holdings, and the remaining 50% interest in Linden Holdings is held by Oaktree Capital Group LLC.
The buyer, AEIF Linden SPV, is an indirect subsidiary of funds managed and controlled by Ares EIF Management LLC (EIF). Through entities it controls, EIF is the sole manager of certain private equity investment funds that invest in power projects in the United States.
Under this now-approved transaction, Aircraft Services will sell its 50% ownership interest in Linden Holdings to AEIF Linden SPV, while Oaktree would retain its 50% share.