Parties seek quasi FERC approval for change in control of Ivanpah shares

GE Albany Global Holdings BV (Albany Holdings), Solar Partners I LLC, Solar Partners II LLC and Solar Partners VIII LLC (the three Solar Partners companies collectively called the “Ivanpah MBR Companies”) on July 7 requested Federal Energy Regulatory Commission authorization for the indirect acquisition of an upstream ownership interest in the Ivanpah MBR Companies by Albany Holdings and other affiliates in the ownership chain.

Each of the Ivanpah MBR Companies owns a phase of the Ivanpah Solar Electric Generating System, an approximately 392.8 MW (nameplate) facility located in the southeastern portion of the Mojave Desert in California. All of the electrical output of the Ivanpah Facility is committed to unaffiliated purchasers – Southern California Edison (SCE) and Pacific Gas and Electric (PG&E) – under long-term power sale agreements, each of 25-30 years duration.

The power sale agreement for Ivanpah Phase 1, which is with PG&E, terminates in January 2039; the Ivanpah Phase 2 power sale agreement, which is with SCE, terminates in January 2035; and the power sale agreement for Ivanpah Phase 3, which is with PG&E, terminates in January 2039.

  • Solar Partners I is a wholly-owned subsidiary of Ivanpah Project II Holdings LLC, which is a wholly-owned subsidiary of Ivanpah Master Holdings LLC (Ivanpah Holdings).
  • Solar Partners II is a wholly-owned subsidiary of Ivanpah Project I Holdings LLC, which is a wholly-owned subsidiary of Ivanpah Holdings.
  • Solar Partners VIII is a wholly-owned subsidiary of Ivanpah Project III Holdings LLC, which is a wholly-owned subsidiary of Ivanpah Holdings.

The voting interests of Ivanpah Holdings are owned 54.5271% by NRG Solar Ivanpah LLC, 12.4005% by BrightSource Ivanpah Holdings LLC and 33.0724% by Danke Schoen Project LLC, a direct, wholly-owned subsidiary of Everlasting Resources LLC, which is, in turn, a direct, wholly-owned subsidiary of Google Inc.

  • NRG Ivanpah is controlled by NRG Energy (NYSE: NRG).
  • BrightSource Ivanpah is part of BrightSource Energy. Alstom BV owns approximately 26% of the combined common and voting preferred stock of BrightSource. Alstom BV is owned 100% by Albany Holdings.
  • Google is a wholly-owned subsidiary of Alphabet Inc., a publicly-traded company. Google Energy LLC, a wholly-owned subsidiary of Google, is a power marketer that has been authorized to sell energy, capacity and ancillary services at wholesale and market-based rates.

Albany Holdings is a wholly-owned subsidiary of GE Energy International Cooperatief U.A., which is directly owned 19.46% by Biacore International AB, 29.20% by Caribe GE International of Puerto Rico Inc. and 51.34% by General Electric (NYSE: GE).

In the transaction, which was completed on November 2015, Albany Holdings acquired the Alstom thermal, renewables and grid businesses and agreed to enter into certain other energy-related joint ventures with Alstom. Through its indirect, minority ownership interest in BrightSource, Alstom BV has an indirect ownership interest in the Ivanpah MBR Companies. Alstom BV has no right to directly exercise control over the activities of the Ivanpah MBR Companies and the ownership arrangements generally support the conclusion that the acquisition by Albany Holdings of the Alstom BV interest in BrightSource did not constitute a change in control of the Ivanpah MBR Companies, as that principle has been applied by the commission in cases and policy statements.

However, because Alstom BV has representation on the Board of Managers of BrightSource and BrightSource has representation on the Board of Managers of Ivanpah Holdings, the applicants are submitting this July 7 application because they have identified certain commission decisions under Section 203 in which the ability to appoint one or more persons to the board of directors is cited as an indication of control that triggers jurisdiction under Section 203. The applicants said they have identified precedent in which “out of an abundance of caution” an entity acquiring passive ownership interests, accompanied by the right to appoint a director, has requested the commission to assume, for purposes of the application, that the transaction is subject to Section 203, and the commission has acted on such requests without determining if the acquired interest was passive or if Section 203 approval is actually required.

In November 2015, through Albany Holdings, General Electric acquired the thermal, renewables and grid businesses of Alstom SA and GE agreed to enter into certain energy-related joint ventures with Alstom. The focus of the acquisition was the combination of the GE and Alstom power equipment manufacturing businesses.

At the time of the transaction, subsidiaries of Alstom had ownership interests in four small wind-energy QFs located in the U.S., each of which has a capacity of less than 20 MW, and accordingly is exempt from Sections 203 and 205 of the Federal Power Act. The QFs are:

  • Adams Wind Facility, a 19.3 MW wind energy project in Cosmos, Minnesota, which is interconnected with and sells all of its output to Northern States Power;
  • Danielson Wind Facility, a 19.3 MW wind energy project in Atwater, Minnesota, which is interconnected with and sells all of its output to Northern States Power;
  • The Colorado facility, a 2.9 MW wind energy project in Boulder, Colorado, that is interconnected with and sells all of its output to Public Service Co. of Colorado; and
  • The Texas facility, a 1.6 MW wind energy project in Lubbock, Texas, that is interconnected with South Plains Electric Cooperative and sells all of its output to Golden Spread Electric Cooperative.
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.