FERC okays sale of northeast U.S. hydro assets to Canadian entity

The Federal Energy Regulatory Commission on May 23 approved a March 17 application from FirstLight Hydro Generating Co. and FirstLight Power Resources Management LLC for a transfer of control of FirstLight Power Resources Holdings Inc. and its indirect wholly-owned public utility subsidiaries FirstLight Hydro and FirstLight Management to PSP H20 FL USA LLC.

FirstLight Hydro owns and operates 13 hydroelectric generation facilities and one kerosene-fired peaking facility totaling approximately 1,332 MW located in the ISO New England (ISO-NE) market.

FirstLight Hydro is an exempt wholesale generator and possesses Commission authorization to make wholesale sales of energy, capacity and ancillary services at market-based rates. FirstLight Management is a power marketer that possesses commission authorization to make wholesale sales of energy, capacity and ancillary services at market-based rates. FirstLight Management and FirstLight Hydro have a power purchase agreement in place pursuant to which FirstLight Management purchases the entire output of the FirstLight Hydro generation facilities. 

FirstLight Holdings has a 100% indirect ownership interest in the applicants. At the time of the closing of this transaction, FirstLight Holdings will also have a 100% indirect ownership interest in NFM Solar Power LLC, the owner of a 2-MW solar generation facility in Northfield, Massachusetts, within the ISO-NE market. The solar generation facility owned by NFM Solar is a qualifying facility.

FirstLight Holdings is an indirect, wholly owned subsidiary of FirstLight Power Enterprises LLC, which is, in turn, an indirectly, wholly owned subsidiary of ENGIE S.A., a French société anonyme.

The purchaser is a special purpose entity established for the purpose of this transaction, and ultimately is owned and controlled by the Public Sector Pension Investment Board, a Canadian Crown corporation. The Pension Board does not own any generating facilities in the ISO-NE market. Pension Board, though, owns an indirect majority interest in two hydroelectric facilities in the PJM interconnection market, totaling 31.5 MW. Also, Pension Board has in indirect ownership interest in a 25-MW solar facility in California. Pension Board also has a majority ownership interest in H2O Power Holding LP, which will operate the generation facilities following completion of the now-approved transaction. 

Under a Purchase and Sale Agreement dated Feb. 24, 2016, FirstLight Enterprises will transfer 100% of its equity ownership interests in FirstLight Holdings to the purchaser. The Purchase and Sale Agreement provides for a Transaction Services Agreement between ENGIE Solutions Inc. and FirstLight Hydro. The Transition Services Agreement will have a term of one year, subject to earlier termination in accordance with the form of agreement’s terms. Under the Transition Services Agreement, following the closing of the transaction, ENGIE Solutions will provide certain business services related to FirstLight Hydro’s businesses. Applicants contemplate that, during the term of the Transition Services Agreement, purchaser will retain ultimate decision-making authority with respect to FirstLight Hydro’s generation facilities and their operations.

FirstLight Hydro owns and operates approximately 1,332 MW of primarily pumped storage and conventional hydroelectric generating assets located within the ISO-NE BAA. Included in this approximately 1,332 MW of generation is an approximately 22 MW kerosene-fired merchant peaking facility located in Preston, Conn., within the ISO-NE.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.