Solar Star Colorado III LLC, which has a 52-MW solar project in Colorado due for commercial operation in December, applied Nov. 19 at the Federal Energy Regulatory Commission for authorization for the indirect disposition of its jurisdictional facilities that may occur in connection with the acquisition by Wells Fargo Wind Holdings LLC of certain veto and consent rights associated with its passive Class A membership interests in SSCO III Holding Co. LLC.
Wells Fargo will acquire 100% of the non-managing and passive Class A membership interests in Solar Star Colorado III, as well as certain veto and consent rights in connection with economic and financial matters of the company associated with those interests, in a two-step transaction.
- In the first step, Wells Fargo made a limited capital contribution to the company on Nov. 13, and, in exchange, Wells Fargo received 100% of the non-managing and passive Class A membership interests in Solar Star Colorado III and limited veto and consent rights with respect to certain specified economic and financial matters of the company.
- Following the issuance of a commission order granting this authorization, Wells Fargo may make an additional capital contribution, at which point Wells Fargo’s veto and consent rights would “step up” to include certain additional rights concerning economic and financial matters of the company. This second step is the “transaction” for which the company is now seeking commission authorization.
The parties agreed to this structure because time was of the essence for Wells Fargo to make its initial equity investment in the company to preserve applicant’s eligibility for certain investment tax credits available under the Internal Revenue Code. Solar Star Colorado III emphasizes that even the increased veto and consent rights to be conferred on Wells Fargo in the second step will be consistent with a passive and non-managing role.
Solar Star Colorado III was formed for the purpose of developing, constructing, owning, and operating the Hooper Solar Project, an approximately 52-MW (nameplate) photovoltaic facility in Alamosa County, Colorado. The project is located in the balancing area authority (BAA) of Public Service Co. of Colorado (PSCo), a unit of Xcel Energy (NYSE: XEL).
Solar Star Colorado III said it currently expects to begin trial operation and testing of the project later in November 2015 and to achieve commercial operation by the end of December 2015. It said it will sell all of the net output of the project to PSCo under two power purchase agreements (PPAs); a short-term PPA through approximately October 2016 and a long-term PPA for the next 20 years.
The current project ownership is under SunPower Corp., a Delaware corporation whose shares are publicly-traded on the NASDAQ. SunPower is headquartered in San Jose, California, and has offices in North America, Europe, Australia, Africa, and Asia.