The Federal Energy Regulatory Commission on Dec. 11 approved the sale by Entergy Corp. (NYSE: ETR) of a 583-MW, gas-fired power plant in Rhode Island.
On Oct. 22, Entergy Services Inc., on behalf of its public utility affiliate Entergy Rhode Island State Energy LP (ERISE), filed an application for commission authorization for the sale by Entergy Nighthawk GP LLC and Entergy Nighthawk LP LLC of all of their equity interests in ERISE to Thunder Snow Power GP LLC and Thunder Snow Power LLC that will involve an upstream change in ownership and control over ERISE.
ERISE owns an approximately 583-MW natural gas-fired facility (RISEC Facility) located in Johnston, Rhode Island, within the ISO New England market. ERISE sells the entire capacity and energy output of the RISEC Facility to its affiliate, Entergy Nuclear Power Marketing LLC (ENPM), a wholesale power marketer.
Thunder Snow GP is a wholly-owned direct subsidiary of Thunder Snow, and Thunder Snow is a wholly-owned, direct subsidiary of Cogentrix RISEC Holdings LLC. At the closing of the transaction, Cogentrix RISEC will be controlled by Cogentrix RISEC CPP II Holdings LLC, which will own a majority of the membership interests and will control the right to designate a majority of the board members of Cogentrix RISEC. These entities are sponsored and managed by The Carlyle Group LP, which is an investment management firm that is a publicly traded entity listed on NASDAQ.
Entergy said in an Oct. 8 announcement that this plant is being sold at a base sales price of roughly $490m, subject to closing adjustments. Carlyle Managing Director and Co-Head of Carlyle Power Partners Matt O’Connor said the Rhode Island plant is among the most efficient combined cycle facilities in New England. “New England represents an attractive market for investment due to its transparency and incentives for reliable generation,” O’Connor added.
The transaction is contingent upon, among other things, obtaining this Dec. 11 approval from FERC and expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Closing is targeted for the end of 2015.
“Our strategy for EWC is focused on being disciplined about reducing risk and freeing up financial resources for other opportunities,” said Entergy Chairman and CEO Leo Denault.
Also on Dec, 11, Narragansett Electric d/b/a National Grid applied with FERC for the authorizations necessary for it to acquire from Entergy Rhode Island State Energy LP certain interconnection assets associated with the RISE combined cycle facility for a total purchase price of $444,268.