West Deptford Energy LLC applied June 16 at the Federal Energy Regulatory Commission for approval of a transaction whereby several investors would acquire interests in the company, which leases a gas-fired power plant in New Jersey.
Under this deal, some or all of MC West Deptford Energy Investments LLC (MC West Deptford), Ullico Infrastructure West Deptford Holdco LLC (Ullico West Deptford), The Prudential Insurance Company of America, ASRC Capital LLC (ASRC Capital) and Perennial West Deptford LLC may indirectly acquire indirect equity interests in West Deptford Energy LLC.
West Deptford asked that the commission issue an order approving this application on or before July 29, which will allow the parties to consummate the transaction as soon as possible thereafter.
West Deptford is an exempt wholesale generator (EWG) that leases and operates an approximately 669-MW (summer rating) natural gas-fired, combined-cycle facility in West Deptford Township, New Jersey. The West Deptford Facility is interconnected with the transmission grid controlled by PJM Interconnection and is in the PJM East sub-market.
West Deptford leases the West Deptford Facility from its affiliate, West Deptford Energy Associates Urban Renewal LP (WD Urban Renewal).
All of the membership interests of West Deptford are owned by West Deptford Energy Holdings LLC (Holdings), all of whose membership interests are owned by WDE Partners LP (WDE Partners). WDE Partners is an indirect subsidiary of LS Power Development LLC (LSP Development). LSP Development develops, owns, and operates independent power projects in the United States and is, among other things, also developing merchant transmission projects in parts of the United States.
WD Urban Renewal is an EWG and the passive owner of the West Deptford Facility. As noted, it leases the West Deptford Facility to West Deptford. The membership interests of WD Urban Renewal are owned by: Holdings (99%); and West Deptford Energy Associates GP LLC (WDEGP) (1%). All of the membership interests of WDEGP are owned by Holdings.
As for the buyers:
- MC West Deptford is an indirect wholly owned subsidiary of Marubeni Power America Inc. (MPAI), which, in turn, is an indirect, wholly owned subsidiary of Japan’s Marubeni Corp. An indirect wholly owned subsidiary of MPAI, MC St. Charles LLC, owns 25% of the equity interests in CPV Maryland LLC, which will own and operate an approximately 726 MW (nameplate) combined cycle, gas-fired electric facility, along with limited interconnection facilities, located in the 5004/5005 and AP South sub-markets of PJM.
- Ullico West Deptford is wholly owned by the Ullico Infrastructure Master Fund LP (UIF) and is managed by Ullico Investment Advisors Inc. (UIA) pursuant to an agreement with UIF GP LLC (UIF GP). UIF GP is the general partner of UIF and is wholly owned by UIA. UIA is a direct, wholly owned subsidiary of Ullico Inc., a labor-owned insurance and financial services company. UIF owns a 10.6% equity interest in Carroll County Energy Holdings LLC, which is constructing an approximately 700-MW combined-cycle facility located in Carroll County, Ohio, and interconnected with the PJM-controlled transmission grid. When complete in 2017, the facility will sell energy and capacity on a merchant basis into the PJM markets.
- Prudential is an indirect subsidiary of Prudential Financial Inc., which, through numerous subsidiaries, provides insurance and a variety of financial products and services in the United States and internationally.
- ASRC Capital is a wholly-owned subsidiary of Arctic Slope Regional Corp. (ASRC). ASRC is a company organized under the laws of Alaska and is the largest Alaska-owned corporation. ASRC, through its subsidiaries, has six primary lines of business operating throughout the United States, including petroleum refining and marketing, government services, energy support services, industrial services, construction and resource development.
- Perennial West Deptford is a wholly owned subsidiary of Perennial Power Holdings Inc., which is jointly owned by Sumitomo Corporation of Americas (60%) and Summit Global Management of America (40%).
The terms of this proposed transaction are set forth in: separate Subscription Agreements, dated as of June 10, by and between Pirlo Energy Holdings LLC (PEH) and each of MC West Deptford, Ullico West Deptford, Prudential, Lincoln, and ASRC Capital; a draft Subscription Agreement by and between PEH and Perennial West Deptford; the Purchase and Sale Agreement, dated as of June 10, by and between Pirlo Energy Investments LLC and WDE Partners; and the Amended and Restated Limited Liability Company Operating Agreement of PEH, dated as of June 10.
The transaction will entail the formation of two new companies: Pirlo Energy Investments LLC (PEI) and Pirlo Energy Holdings LLC (PEH). All of the membership interests of PEI will be owned by PEH. PEH will have two classes of membership interests: Class A and Class B membership interests.
Pursuant to the Subscription Agreements, the new investors will acquire Class A membership interests of PEH. Perennial West Deptford also has the option to purchase additional interests in PEH from WDE Partners following these initial purchases. Following these purchases, PEH’s Class A membership interests will be owned or controlled by some or all of: WDE Partners (directly and/or through one or more subsidiaries) (0%-50%); MC West Deptford (0%-50%); Prudential (directly and/or indirectly through one or more affiliates) (0%-50%); Ullico West Deptford (0%-50%); ASRC Capital (0%-50%), and Perennial West Deptford (0%-50%).
A newly-formed, indirect subsidiary of LSP Development, Pirlo Class B Holdings LLC (Pirlo Holdings), will own 100% of PEH’s Class B membership interests and will be the managing member of PEH.