Ownership changes sought to aid financing for 1,100-MW Cricket Valley project

Saying this approval is needed to aid financing for an 1,100-MW project, Cricket Valley Energy Center LLC (CVEC), Cricket Valley Energy Holdings LLC, AP Cricket Valley Holdings II Inc. (APCVHII), APNA Holdings GmbH, 730 Cricket LLC, BlackRock Financial Management (BFM), and ASG Frontier Holdings LLC on July 22 jointly petitioned the New York State Public Service Commission for a declaratory ruling.

They want the commission to decide that it does not need to review under New York State Public Service Law (PSL) Section 70:

  • APCVHII’s proposed sale of 16%-30% of the issued and outstanding membership interests in Cricket Valley Energy Holdings to 730 Cricket (the “730 Cricket Proposed Transaction”)
  • APCVHII’s proposed sale of 7.75%-15% of the issued and outstanding membership interests in Cricket Valley Energy Holdings to ASG Frontier (the “ASG Frontier Proposed Transaction”)
  • future transfers by APCVHII to 730 Cricket of up to 3% of the issued and outstanding membership interests in Cricket Valley Energy Holdings based on the performance of the facility (the “730 Cricket Additional Transfers”)
  • future transfers by APCVHII to ASG Frontier of up to 3% of the issued and outstanding membership interests in Cricket Valley Energy Holdings based on the performance of the facility (the “ASG Frontier Additional Transfers”)

In the alternative, the petitioners requested that the commission approve the Proposed Transactions and Additional Transfers, without modification or condition, pursuant to PSL Section 70 and any other statutory or regulatory provision deemed applicable.

They wrote: "The Proposed Transactions and Additional Transfers are in the public interest because they will provide needed capital for the development of CVEC’s proposed 1,100 MW electric generating facility in New York." No competitive issues are raised by the Proposed Transactions or Additional Transfers, they added.

Petitioners also requested a declaratory ruling that the transfer of up to 15% of the issued and outstanding membership interests in Cricket Valley Energy Holdings to a yet-to-be-determined third party investor is not a jurisdictional transfer under PSL Section 70 and will not cause the investor to become an electric corporation under the PSL if the investor will have the same class of passive ownership interests with limited voting rights that 730 Cricket, BFM and ASG Frontier will have as a result of the consummation of the Proposed Transactions.

CVEC has structured and is seeking commitments from equity sources and debt providers for a $1.5 billion financing of the facility. CVEC anticipates a closing of the financing and commencement of construction of the facility and a 14.5-mile transmission line to interconnect the facility to the transmission system in the third quarter of 2016. Financing commitments will expire if the financial closing is not achieved within limited time periods. Also, permits will lapse if construction of the facility is not commenced within specified time frames. Therefore, petitioners request expedited review and commission action on the petition no later than the commission’s Sept. 15 session.

CVEC was formed for the ownership, development, financing, construction, testing, operation and maintenance of the facility. The commission granted CVEC a Certificate of Public Convenience and Necessity for the construction of a combined cycle, natural gas-fired, 1,100-MW facility on an inactive industrial site located in the Town of Dover, Dutchess County, New York.

CVEC currently has three members: AP Cricket Valley Holdings I Inc. holds an approximate 40% interest; APCVHII holds an approximate 40% interest; and MC CVEC Project Holdings I LLC (MCCVEC) holds an approximate 20% interest.

  • On April 20, the commission authorized J Cricket Holdings LLC (JCH) to acquire a 100% ownership interest in APCVHI (the “JCH Transaction”). JCH is a wholly owned indirect subsidiary of Chubu Electric Power Co. U.S.A. Inc., which in turn is a wholly owned subsidiary of Chubu Electric Power Co. Inc. (CEPC) out of Japan
  • APCVHII is indirectly 100% owned by AP Energy Holdings Inc. (a Massachusetts corporation), a wholly owned subsidiary of APNA
  • MCCVEC is owned by Marubeni Power International Inc.
  • Cricket Valley Energy Holdings is a holding company that will be inserted between CVEC and APCVHI, APCVHII, and MCCVEC and will hold 100% of the membership interests of CVEC. The company was formed for the ownership, development, financing, construction, testing, operation and maintenance of the facility, solely through its ownership of CVEC. The current members of CVEC have a petition pending before the commission requesting that the commission either declare that the transfer of 100% of their membership interests in CVEC to Cricket Valley Energy Holdings in the same proportion as their interests in CVEC, such that the company will become the owner of 100% of the membership interests of CVEC (the “Intra-Corporate Restructuring”), is outside the scope of PSL Section 70 or approve such transfer under PSL Section 70 prior to the consummation of the Proposed Transactions
  • To facilitate construction financing, the members of CVEC may also form another holding company, called Cricket Valley Energy Partners LLC (“CV Energy Partners”), which would directly wholly own Cricket Valley Energy Holdings and be directly wholly owned by the members in the same proportion as their interests in Cricket Valley Energy Holdings and in the same manner as described in this petition. Out of an abundance of caution, petitioners request that the Commission declare that the insertion of CV Energy Partners between the members and Cricket Valley Energy Holdings is not a jurisdictional transfer and no approval is required under PSL Section 70 because no new owner will be brought into the organizational structure, no existing owner will be removed, and the proportionate shares of the indirect owners remain the same after the reorganization
  • APNA is a Swiss subsidiary of Advanced Power AG (APAG). APNA is a Swiss chartered limited liability company. It is a holding company whose sole purpose is to own the shares of APAG’s various companies in the United States
  • 730 Cricket is wholly owned by 730 Power Development LLC, which in turn is wholly owned by Teachers Insurance and Annuity Association of America (TIAA). TIAA is a nonprofit organization that provides investment and insurance services for those working in education, medicine, culture and research
  • ASG Frontier is managed by BFM, a registered investment advisor. BFM is indirectly wholly owned by BlackRock Inc., which is a leading publicly-traded investment management firm that provides a broad range of investment and risk management services to institutional and retail clients worldwide
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.