The Federal Energy Regulatory Commission on Jan. 13 approved a September 2015 application from Upstate New York Power Producers Inc., Cayuga Operating Co. LLC and Somerset Operating Co. LLC for authorization for a transaction in which Riesling Power LLC will acquire from Upstate New York Power ownership interests in both Cayuga and Somerset.
Cayuga and Somerset operate coal-fired power plants in New York that would be targeted for closure or conversion to gas under a plan announced Jan. 13 by New York Gov. Andrew Cuomo to end coal-fired power in the state by 2020.
Upstate New York Power wholly owns two limited liability companies, Cayuga and Somerset, which own and operate the Cayuga Facility and Somerset Facility, respectively. The Cayuga Facility is a 312-MW, coal-fired plant located in Lansing, New York. The Somerset Facility is a 668-MW coal-fired facility located in Somerset, New York. Both facilities are situated within the New York Independent System Operator (NYISO) market.
The buyer, Riesling, is a wholly owned subsidiary of Bicent Power LLC. Bicent Power currently owns 100% of five public utilities that own and operate electric generating facilities in Colorado, California, Montana, and Massachusetts:
- BIV Power Generation Co. LLC, which owns and operates a 123-MW gas-fired facility located near Brush, Colorado;
- Colorado Power Partners, which owns and operates a 55-MW gas-fired facility and a 24-MW gas-fired facility located near Brush, Colorado;
- Rocky Mountain Power LLC, which owns and operates a 115.7-MW facility located in Hardin, Montana;
- San Joaquin Cogen LLC, which owns and operates a 48-MW facility located in Lathrop, California; and
- Tanner Street Generation LLC, which owns and operates a 85-MW dual fuel combined cycle plant located in Lowell, Massachusetts.
Investment funds managed or advised by GSO Capital Partners LP currently hold an approximately 97% equity ownership interest in Bicent Power. GSO represents the credit-oriented business of The Blackstone Group LP, a global alternative asset manager.
Upstate New York Power Producers was originally formed to acquire the Cayuga and Somerset facilities from bankrupt AES Eastern Energy LP in 2012. Its outstanding common stock is 100% owned by entities that own or owned certain pass-through certificates issued by a series of owner trusts that were formed to provide financing under a leveraged lease structure for a transaction in 1999 involving AES Eastern and certain of AES Eastern’s affiliates, whereby the AES Entities purchased Somerset and Cayuga from New York State Electric and Gas.
An application by the parties for the approval of this deal filed at the New York State Public Service Commission was still pending as of Jan. 19.