FERC okays NextEra buy of High Lonesome wind farm in New Mexico

The Federal Energy Regulatory Commission on March 30 approved a Feb. 29 application from High Lonesome Holdings LLC and High Lonesome Mesa Wind Holdings LLC for authorization for a transaction whereby High Lonesome Holdings will transfer 100% of the direct ownership interests in High Lonesome Mesa LLC and its jurisdictional facilities to High Lonesome Mesa Wind Holdings.

The jurisdictional facilities affected by the transaction consist of High Lonesome Mesa’s market-based rate tariff and any related agreements, various books and records, and the interconnection facilities associated with a 100-MW wind facility. High Lonesome Mesa LLC leases and operates the facility located in Torrance County, New Mexico, which is located within the balancing authority area (BAA) of Public Service Co. of New Mexico (PNM).

All of the electrical output of the facility is sold to Arizona Public Service (APS) pursuant to a long-term power purchase agreement in effect through July 2039. All of the membership interests of High Lonesome Mesa LLC are now owned by High Lonesome Holdings. High Lonesome Holdings is directly owned by Macquarie Energy North America Investments LLC (MENAI) (77.47 percent) and HAT Holdings I LLC (HAT Holdings) (22.53 percent).

  • MENAI is an indirect, wholly owned subsidiary of Macquarie Bank Limited (MBL), which in turn is wholly owned by Macquarie Group Limited (MGL).
  • HAT Holdings is a direct, wholly owned subsidiary of Hannon Armstrong Capital LLC (HA Capital LLC), which in turn is a wholly owned subsidiary of Hannon Armstrong Sustainable Infrastructure L.P. (Hannon LP). Hannon LP is owned 99 percent by Hannon Armstrong Sustainable Infrastructure Capital Inc. (Hannon Armstrong), and 1 percent by various individuals and investment funds. 

The purchaser is a direct, wholly owned subsidiary of ESI Energy LLC, which in turn is a direct, wholly owned subsidiary of NextEra Energy Resources, part of Florida-based NextEra Energy (NYSE: NEE).

The purchaser has the following two affiliates that own or control electric generation within the PNM BAA, the relevant geographic market for the transaction:

  • FPL Energy New Mexico Wind LLC owns and operates an approximately 204 MW wind facility located in Quay and DeBaca counties, New Mexico. All of the output of New Mexico Wind is fully committed under a long-term power purchase agreement (PPA) to PNM.
  • Red Mesa Wind LLC owns and operates a 102 MW wind facility located in Cibola County, New Mexico. All of the output of Red Mesa is fully committed under a long-term PPA to PNM.

Applicants state that, pursuant to the transaction, High Lonesome Holdings will sell, and purchaser will buy, 100 percent of the membership interests in High Lonesome Mesa. Applicants state that, after consummation of the transaction, purchaser will directly own the membership interests in High Lonesome Mesa and indirectly own 100 percent of High Lonesome Mesa’s wholly owned subsidiary, High Lonesome Mesa Investments LLC.

Applicants said that the energy and capacity owned by purchaser’s generation affiliates and the facility are fully committed under long-term PPAs; New Mexico Wind and Red Mesa have long-term PPAs with PNM, while High Lonesome Mesa has a long-term PPA with APS.  Thus, applicants conclude that, because all affiliated generation in the market is fully committed and the generation being acquired also is fully committed, there is no effect on competition.