On Oct. 27, the Federal Energy Regulatory Commission approved a Sept. 14 application from Eel River Power LLC, the operator of a 28-MW power plant in California, requesting commission authorization for the transfer of its jurisdictional assets to Humboldt Redwood Co. LLC.
The jurisdictional facilities affected consist of Eel River’s market-based rate schedule, interconnection facilities, power purchase agreement, and related books and records.
Eel River owns and operates a 28-MW biomass-fired qualifying small power production facility (Eel River Facility) located in the Town of Scotia, California, within the California Independent System Operator (CAISO) market. Eel River sells the entire output from the Eel River Facility to Pacific Gas and Electric (PG&E) under a long-term power purchase agreement (PPA).
Eel River is a wholly owned subsidiary of RED OPCO LLC, which is a wholly owned subsidiary of Greenleaf Power Consolidated LLC. Denham Commodity Partners Fund IV LP (Denham Fund IV) indirectly owns an approximately 32% interest in Greenleaf Power, Denham Commodity Partners Fund V LP (Denham Fund V) owns a 63.8% indirect interest in Greenleaf Power, and RED Investment LLC owns a non-controlling 4.2% indirect interest in Greenleaf Power. Both Denham Fund IV and Denham Fund V are private investment funds.
Humboldt Redwood owns and operates a saw mill located in Scotia, California. Humboldt Redwood primarily sells lumber to related parties, retail and wholesale lumber yards, and contractor lumber yards throughout the western United States. Humboldt Redwood does not own, control or operate any electric generation or transmission facilities or inputs to electric power production in the CAISO market.
Alexander Redwood Partners LLC directly holds and controls more than 80% of the capital and profit interests in Humboldt Redwood. Alexander Redwood is headquartered in San Francisco, California, and is focused on the forest products industry. Applicant states that none of Alexander Redwood or its affiliates, including its upstream affiliates, own operate or control generation capacity in CAISO.
Marathon Asset Management LP (Marathon) either directly, or through an alternative investment vehicle created and controlled by Marathon or one of its affiliated funds, holds and controls more than 10% of the capital and profits interests in Humboldt Redwood. Marathon is a global investment manager headquartered in New York and is focused on investing in global credit and fixed income markets. Neither Marathon nor its affiliates own, operate or control generation capacity in CAISO.
The proposed transaction will be done under a Purchase and Sale Agreement. Following consummation of this deal, Humboldt Redwood will own the Eel River Facility, including its interconnection facilities. Humboldt Redwood will operate the Eel River Facility as a small power production qualifying facility, and will sell wholesale power to PG&E and provide energy for consumption by the Town of Scotia.