FERC okays sale of Essential Power-affiliated plants to Carlyle Group

The Federal Energy Regulatory Commission on June 8 approved a deal where several power plants affiliated with Essential Power LLC will change hands.

On Feb. 29, Essential Power LLC (Essential Power), Essential Power Massachusetts LLC (Essential Mass), Essential Power Newington LLC (Newington), Essential Power OPP LLC (OPP), Essential Power Rock Springs LLC (Rock Springs) and Lakewood Cogeneration L.P. (Lakewood), which are collectively called the Essential Power Companies, applied along with buyer Nautilus Generation LLC for authorization for the disposition of jurisdictional facilities that will result from the transfer of 100% of the direct membership interests in Essential Power Investments LLC (Essential Power Investments) from IFM Global Infrastructure Fund to the buyer.

Essential Power operates as a wholesale power marketer authorized to make wholesale sales of energy, capacity, and ancillary services at market-based rates. Essential Power does not own any generation facilities and does not control any unaffiliated generation capacity. Essential Power is a wholly owned subsidiary of Essential Power Holdings LLC, a wholly owned subsidiary of Essential Power Investments LLC.

  • Essential Mass owns a portfolio of approximately 231.2 MW of generation capacity located in Massachusetts and interconnected to transmission facilities owned by Northeast Utilities that are subject to the operational control of ISO New England (ISO-NE).
  • Newington owns an approximately 554 MW facility located in Portsmouth, New Hampshire, that is interconnected to transmission facilities owned by Public Service Company of New Hampshire that are subject to the operational control of ISO-NE.
  • OPP owns an approximately 336 MW facility located in Lakewood, New Jersey. The OPP Facility is interconnected to transmission facilities owned by Jersey Central Power & Light that are subject to the operational control of PJM Interconnection. The OPP Facility is located within the PJM East and 5004/5005 submarkets of PJM.
  • Rock Springs owns a 330 MW generation facility in Rising Sun, Maryland. The Rock Springs Facility is interconnected to transmission facilities owned by PECO Energy within the PJM East and 5004/5005 submarkets of PJM.
  • Lakewood owns an approximately 242 MW generation facility located in Lakewood, New Jersey. This facility is interconnected with transmission facilities owned by Jersey Central that are subject to the control of PJM. The Lakewood Facility is located within the PJM East and 5004/5005 submarkets. Essential Power indirectly owns an 80% interest in Lakewood. The remaining 20% of Lakewood is owned by Osaka Gas Energy America Corp. Applicants add that Osaka Gas’ ownership interest in Lakewood will not be affected by this transaction.

The seller in this deal is a fund managed by IFM Investors Pty Ltd., a global investment manager. According to the applicants, it separately indirectly holds an approximately 25% interest in Duquesne Light Holdings, which owns transmission and distribution facilities within the PJM market. However, the Duquesne facilities are not related to or involved in this transaction.

At the closing of this transaction, the buyer will be controlled by Cogentrix Essential Power Holdings LLC (Cogentrix Essential Power), which will own all or a majority of the limited liability company interests of the buyer. At the closing of the transaction, Cogentrix Essential Power will have two members, Carlyle Power CPP II Essential LLC (Carlyle CPP II Essential), which will own a majority of the membership interests, and control the right to designate a majority of the board members, and Carlyle Power Partners II-C LP (Carlyle CPP II-C). At the closing of the transaction, Carlyle CPP II Essential, in turn, will be managed by investment fund vehicles sponsored and managed by the Carlyle Group LP (Carlyle Group) or affiliates thereof. Carlyle Group is a global alternative investment management firm and a publicly traded entity.

The buyer will acquire 100% of the direct membership interests in Essential Power Investments from the seller. As a result, the buyer will indirectly own 100% of Essential Power, Essential Mass, Newington, OPP, and Rock Springs and 80% of Lakewood. The seller will not hold any ownership interest in the Essential Power Companies following the consummation of this deal.

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.