Effingham County Power LLC, SEPG Energy Marketing Services LLC (SEMS) and Washington County Power LLC on June 30 applied at the Federal Energy Regulatory Commission for approval of ownership changes for two gas-fired power plants in Georgia.
These changes would be under a series of transactions:
- the termination of a lease agreement between Effingham County Power and the Effingham County Industrial Authority (ECIA) under which Effingham currently leases and operates a power plant and associated interconnection equipment owned by ECIA, and the transfer of ownership of the Effingham Facility from ECIA to Effingham (called the “Effingham Unwinding Transaction”);
- the termination of a lease agreement between Washington County Power and the Development Authority of Washington County (DAWC) pursuant to which Washington currently leases and operates a power plant and associated interconnection equipment owned by DAWC, and the transfer of ownership of the Washington Facility from DAWC to Washington (“Washington Unwinding Transaction”);
- the contribution of 100% of the direct membership interests in SEMS by CPP SEPG Holdings LLC (CPP SEPG) to Mackinaw Power LLC, which is indirectly owned by Southeast PowerGen Holdings LLC (SEPG Holdings), which, in turn, is directly owned by CPP SEPG (75.05%) and EFS Southeast PowerGen (EFS SEPG) (24.95%) (“SEMS Contribution Transaction”), followed by the transfer of Units 1 and 4 of the Washington Facility, including a pro rata share of related interconnection facilities, and related tolling agreements from Washington to SEMS (“Washington Separation Transaction”); and
- the distribution of 100% of the direct membership interests in SEMS from Mackinaw Power to a newly formed holding company (HoldCo), which at the time of such transfer will be a wholly-owned indirect subsidiary of SEPG Holdings (“SEMS Distribution Transaction”).
The affected companies are:
- Effingham leases and operates the Effingham Facility, an approximately 597 MW (nameplate) combined cycle, natural gas-fired plant in Rincon, Georgia. The facility currently is owned by ECIA and leased to Effingham under an industrial revenue bond financing arrangement. It is interconnected to the transmission system owned and operated by Georgia Power, located within the Southern Company Services (SOCO) balancing authority area (BAA). Effingham is an exempt wholesale generator (EWG) under the Public Utility Holding Company Act of 2005 (PUHCA).The commission has authorized Effingham to make wholesale sales of energy, capacity, and certain ancillary services at market-based rates. The entire output of the Effingham Facility is sold on a merchant basis into the wholesale market. Effingham is a wholly-owned indirect subsidiary of Southeast PowerGen LLC (SEPG), which is a wholly-owned direct subsidiary of SEPG Holdings. SEPG Holdings is directly owned by CPP SEPG (75.05%) and EFS SEPG (24.95%).
- Washington leases and operates the Washington Facility, an approximately 796 MW (nameplate) simple cycle, natural-gas fired facility located in Linton, Georgia. The Washington Facility currently is owned by DAWC and leased to Washington pursuant to an industrial revenue bond financing arrangement. The Washington Facility is interconnected to the transmission system owned by Georgia Power and is located in the SOCO BAA. Washington is an EWG under PUHCA. The commission has authorized Washington to sell energy, capacity, and ancillary services at wholesale at market-based rates. The output of Units 1 and 4 of the Washington Facility is sold to Central Georgia Electric Membership Corp. (CGEMC) and Snapping Shoals Electric Membership Corp. (SSEMC), respectively, pursuant to long-term tolling agreements with each such counterparty in effect through Dec. 31, 2035. The output of Units 2 and 3 of the Washington Facility is sold to Georgia Power under a long-term tolling agreement that extends through May 31, 2024. Washington is a wholly-owned direct subsidiary of Mackinaw Power, which is a wholly-owned indirect subsidiary of SEPG.
- SEMS was originally formed to operate as a marketer of capacity, energy, and ancillary services in the United States. Following the SEMS Contribution Transaction, SEMS will own generation facilities and will be an EWG under PUHCA. The commission has authorized SEMS to sell energy, capacity, and ancillary services at market-based rates. SEMS currently does not own or control any electric generation facilities, any electric transmission or distribution facilities, or any essential inputs to electricity products or electric power production. SEMS currently is a wholly-owned direct subsidiary of CPP SEPG.
The Carlyle Group Cogentrix Southeast Gen Holdings LLC (CSGH) owns 58.53% of the membership interests of CPP SEPG and has the right to designate two of the four board members of CPP SEPG. The sole member of CSGH is Carlyle Power Southeast Gen LLC (CPSG). CPSG is, in turn, owned and managed by its members (collectively called the “CPP II Fund Vehicles”), all of which are investment funds vehicles sponsored and managed by The Carlyle Group LP or affiliates thereof.
Cogentrix Southeast Gen CPOCP Holdings LLC (CSGH CPOCP) owns 36.6% of the membership interests of CPP SEPG and has the right to designate a board member of CPP SEPG. Again, this company is indirectly controlled by The Carlyle Group. The Carlyle Group is a global alternative investment management firm that is a publicly traded entity listed on NASDAQ.
EFS SEPG is 100% owned by EFS Renewables Holdings LLC, which is 100% owned by Aircraft Services Corp., which is affiliated with General Electric (NYSE: GE).
Pursuant to the Effingham Unwinding Transaction, the lease agreement between Effingham and ECIA will be terminated and ownership of the Effingham Facility will be transferred to Effingham. The Effingham Unwinding Transaction will not affect the upstream ownership of Effingham. Effingham will remain a wholly-owned indirect subsidiary of SEPG Holdings.
Pursuant to the Washington Unwinding Transaction, the lease agreement between Washington and DAWC will be terminated and ownership of the Washington Facility will be transferred to Washington. The Washington Unwinding Transaction will not affect the upstream ownership of Washington. Washington will remain a wholly-owned indirect subsidiary of SEPG Holdings.
A company contact is: Jacob A. Pollack, Senior Vice President, General Counsel, Cogentrix Energy Power Management LLC, 9405 Arrowpoint Boulevard, Charlotte, NC 28273, Tel: (704) 525-3800, email@example.com.