J Cricket Holdings LLC (JCH), AP Cricket Valley Holdings I Inc. (APCVH I) and gas-fired power plant developer Cricket Valley Energy Center LLC (CVEC) on Feb. 17 petitioned the New York State Public Service Commission for a declaratory ruling that the commission need not review under Public Service Law Section 70 the transfers of a 40% indirect ownership interest in CVEC.
CVEC is an entity subject to the commission’s lightened regulation, thus this request for basically a non-approval of these transactions.
JCH is a wholly owned indirect subsidiary of Chubu Electric Power Co. U.S.A. (CEPC USA), which is, in turn, a wholly owned subsidiary of Chubu Electric Power (CEPC) out of Japan. JCH has exercised an option to purchase 100% of the stock of APCVH I. APCVH I holds a 40% ownership interest in CVEC. The option to purchase the stock of APCVH I has been granted by APNA Holdings GmbH, a wholly-owned subsidiary of Advanced Power AG, which is currently the owner of 100% of the common stock of APCVH I.
Upon closing of this deal, JCH will own 100% of the ownership interests in APCVH I and, indirectly, a 40% ownership interest in CVEC. Closing on this agreement is anticipated to occur in tandem with the closing of the construction financing for CVEC’s proposed 1,080 MW facility in New York.
On or about July 1, 2016, upstream ownership of JCH will be transferred from CEPC to JERA Co. Inc., a joint venture currently owned 50% by CEPC and 50% by Tokyo Electric Power Co. (TEPCO). JERA was formed in 2015 to hold the international assets of CEPC and TEPCO and related business activities. On or about July 1, 2016, CEPC and TEPCO will integrate a number of their energy business activities within the scope of JERA, including their respective United States power generation and energy infrastructure businesses.
“All changes in the parent entities upstream of CVEC described herein are in the public interest because the participation of new upstream owners will provide needed capital for the development of the CVEC Project,” said the application. “No competitive issues are raised by the changes in the upstream ownership of CVEC presented in this Petition. None of JCH, CEPC USA, CEPC, TEPCO, JERA or their respective affiliates owns or controls any generating capacity located in New York, and their ownership interests in the neighboring control areas of ISO New England (‘ISO-NE’) and PJM Interconnection, LLC (‘PJM”‘) are only de minimis. Accordingly, the transfers of upstream ownership interests in CVEC described herein will have no adverse effect on market concentration in New York.
“The Petitioners respectfully request that the Commission approve this Petition and issue a declaratory ruling that the Wallkill Presumption applies to the proposed transfers of upstream indirect ownership interests in CVEC and decline to further review these transfers under PSL Section 70. In the alternative, Petitioners respectfully request that the Commission approve this Petition and issue an order approving the transfers of indirect ownership interests in CVEC described in this Petition. Finally, Petitioners, respectfully urge that the Commission act on this Petition on or before its April 12, 2016, session. Commission approval of this Petition at the soonest possible date is critical to provide assurance to the Petitioners and, in particular to JCH, CEPC USA, CEPC, TEPCO and JERA in order to prepare for closing of JCH’s indirect ownership interest in CVEC under the Stock Purchase Agreement and for the integration of JCH (along with CEPC USA’s global energy and infrastructure businesses) into JERA, to be consummated in the JERA Transfer.”
The commission has already granted CVEC a Certificate of Public Convenience and Necessity for the construction of the CVEC Project in the Town of Dover, Dutchess County, New York. The project is currently under development.
CVEC currently is owned by three members: APCVH I with a 40% interest; AP Cricket Valley Holdings II Inc. (APCVH II) with a 40% interest; and MC CVEC Project Holdings I LLC (MCCVEC) with a 20% interest. APCVH I is 100% owned by APNA. APCVH II is owned 100% by AP Energy Holdings Inc., a wholly owned subsidiary of APNA. MCCVEC is owned by Marubeni Power International Inc. APNA is a holding company whose sole purpose is to own the shares of APAG’s various companies in the United States.
The application noted that in July 2015, CVEC petitioned the commission for approval to enter into debt instruments in the amount not to exceed $1.5 billion to finance the construction of the CVEC Project. The commission granted CVEC’s petition on Nov. 19, 2015.