Alcoa to sell 221 MW of hydro in North Carolina to I Squared

Alcoa Power Generating Inc. (APGI), Cube Yadkin Generation LLC (Genco) and Cube Yadkin Transmission LLC (Transco) applied July 25 at the Federal Energy Regulatory Commission for authorization for the sale and transfer by APGI of 100% of its ownership interests in the Yadkin Hydroelectric Project, and (the sale and transfer by APGI of 100% of its ownership interests in certain transmission facilities and related jurisdictional assets. 

Following the proposed transaction, Genco will directly own and operate the Yadkin Project, and Transco will directly own and operate the Yadkin Transmission Facilities. APGI will no longer hold any ownership interests in the Yadkin Project or Yadkin Transmission Facilities.

The parties said they intend to close the transaction on or about Nov. 1, 2016, subject to obtaining all necessary regulatory approvals and satisfaction of other conditions precedent agreed to by the parties. Applicants requested an abbreviated 21-day comment period and expedited action on this application within 60 days.

APGI’s Yadkin Division owns and operates the Yadkin Project, consisting of four hydroelectric stations near Badin, North Carolina, with a total summer rating of approximately 221 MW. The four stations include:

  • the High Rock Station (approximately 33 MW summer rating);
  • the Tuckertown Station (approximately 39 MW summer rating);
  • the Narrows Station (approximately 119 MW summer rating); and
  • the Falls Station (approximately 30 MW summer rating).

Historically, the power generated by the Yadkin Project was supplied to APGI parent Alcoa Inc. for use in its Badin aluminum smelter plant, which is no longer in operation but continues to have an electricity load of approximately 1 MW. Today, the bulk of the power is sold into the wholesale market. The Yadkin Division is its own balancing authority area (BAA), owning and operating approximately 21 miles of 13.8 kV and 100 kV transmission lines that interconnect the Yadkin Project with the Duke Energy Carolinas LLC and Duke Energy Progress-East BAAs.

These buyers are wholly-owned direct subsidiaries of Cube Hydro Carolinas LLC, which in turn is a wholly-owned direct subsidiary of Helix Partners LLC. Helix HoldCo LLC directly owns 98.5% of the membership interests in Helix Hydro Partners. Helix HoldCo is directly owned by ISQ Hydro Aggregator LLC (62.5%) and ISQ Helix Aggregator LLC (28.1%). Both ISQ Hydro Aggregator and ISQ Helix Aggregator are indirectly controlled by I Squared Capital, a private equity investment manager having a series of limited partnership investment funds operated by a general partner that is wholly controlled by I Squared Capital.

These buyers are not affiliated with any entities that own or control generation capacity in the Yadkin BAA or in either of the two markets that interconnect with the Yadkin BAA, the Duke Energy Carolinas and Duke Energy Progress BAAs.

Cube Yadkin Generation on July 25 separately applied with FERC for market-based rate authority.

A buyer contact is: Eli W. L. Hopson, Cube Hydro Partners LLC, 2 Bethesda Metro Center, Suite 1330, Bethesda, MD 20814, Tel: (240) 482-2714, ehopson@cubehydro.com.

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.