Black Hills Colorado IPP LLC on Feb. 17 asked the Federal Energy Regulatory Commission for authorization of the sale by Black Hills Electric Generation LLC of 49.9% of Black Hills Generation’s membership interest in the applicant to AIA Colchis LLC.
Black Hills Colorado IPP owns and operates a 200-MW (nameplate) gas-fired plant in Pueblo, Colorado, which includes two separate, 100-MW combined cycle gas-fired units and associated interconnection facilities at the Pueblo Airport Generation Station. The applicant has market-based rate authority and currently sells all of the capacity and energy output of the facility to affiliate Black Hills/Colorado Electric Utility Co. LP under a long-term power purchase agreement that has been reviewed and authorized by the commission.
The company requested that the commission provide for a 21-day comment period and further requested the issuance of an order approving the transaction no later than April 1.
Black Hills Colorado IPP is a wholly-owned indirect subsidiary of Black Hills Corp. (NYSE: BKH). It was created to develop, own and operate these two combined cycle gas-fired units and associated interconnection facilities in Pueblo. It developed the facility after being selected by Black Hills/Colorado Electric as the lowest cost bidder through a competitive solicitation process authorized by the Colorado Public Utility Commission and overseen by an independent evaluator.
The applicant sells the entire capacity and energy from the facility on a unit-contingent basis pursuant to a power purchase agreement with its regulated transmission and distribution utility affiliate Black Hills/Colorado Electric for a term extending through Dec. 31, 2031.
One-hundred percent of the membership interests in the applicant are currently held by Black Hills Generation. Black Hills Generation is a wholly-owned direct subsidiary of Black Hills Non-Regulated Holdings LLC. Black Hills Generation is an intermediate holding company that directly and wholly owns two FERC-jurisdictional entities: the applicant; and Black Hills Wyoming LLC, which owns a 76.5% interest in the Wygen I facility near Gillette, Wyoming. Black Hills Wyoming’s ownership in Wygen I corresponds to 68.9 MW of generating capacity.
The buyer, AIA Colchis, is a special purpose entity formed for the purpose of investing in energy infrastructure projects. Beneficial interests in AIA Colchis are ultimately held by these upstream entities: 0.3904% by arGo Energy North America MM LLC; 48.8048% by the California State Teachers Retirement System (CalSTRS); 48.8048% by Sogra Investments Holdings B.V., a special purpose vehicle controlled by APG Asset Management N.V., a Dutch corporation; and a 2% passive interest held by a U.S. private equity fund that is not affiliated with any of these other investors.