Riverstone Holdings LLC, Talen Energy Supply LLC, MACH Gen LLC, New MACH Gen LLC and New Athens Generating Co. LLC applied July 15 at the New York State Public Service Commission for an approval related to Riverstone’s plan to buy the part of Talen Energy (NYSE: TLN) that it does not already own.
They asked the New York commission for a declaratory ruling that the acquisition of additional upstream ownership interests in New Athens by affiliates of Riverstone will not be reviewed further under Section 70 of the Public Service Law (PSL). They said tthe acquisition constitutes a transfer of upstream ownership interests in a lightly regulated wholesale merchant generating facility.
Riverstone controls the general partners of three limited partner investment funds which, in turn, own portfolio companies that, in the aggregate, currently hold approximately 35% of the outstanding common stock of Talen Energy, an upstream owner of Talen Energy Supply, MACH Gen, New MACH Gen and New Athens.
New Athens owns and operates a three-unit 1,137.9 MW (summer rating) natural gas-fired combined cycle facility located in the Town of Athens, Greene County, New York. The New Athens Facility is interconnected with the transmission system of Niagara Mohawk Power.
The New Athens Facility sells power to, and receives energy management and marketing services from, Consolidated Edison Energy through an Energy Management and Marketing Agreement. Consolidated Edison Energy, in turn, sells power from the New Athens Facility into the markets administered by the New York ISO.
Petitioners own, control, or are affiliated with 1,229.9 MW of generation in the NYISO control area. In addition to the 1,137.9 MW (summer rating) New Athens Facility, they own, control, or are affiliated with three companies that own or control 92 MW of generation capacity in NYISO. Each is an alternative energy qualifying facility under Section 2 (2-b) of the PSL, and is exempt from commission regulation:
- Lyonsdale Biomass LLC owns a 19 MW (summer rating) facility that generates electricity through the burning of wood fuel and is located in Lyons Falls, New York.
- ReEnergy Black River LLC owns a 55 MW (summer rating) biomass-fired facility located at the Fort Drum army base in Le Ray, New York.
- ReEnergy Chateaugay LLC owns an 18 MW (summer rating) biomass-fired facility located in the Town of Chateaugay, New York.
Petitioners also own, control, or are affiliated with 524.5 MW of generation in the ISO New England control area, and 11,335.33 MW of generation capacity in the PJM Interconnection control area.
Under the terms of a June 2 agreement, Riverstone would buy the rest of Talen Energy under a complex transaction. Each share of Talen Energy’s common stock outstanding as of immediately prior to the effective time of the merger (other than shares held in treasury by Talen Energy, shares held by Talen Energy’s subsidiaries, shares held by the Riverstone Funds, and shares pursuant to which dissenting rights under Delaware law have been properly exercised and not withdrawn or lost) will be automatically converted into the right to receive $14.00 in cash, and the Riverstone Funds will convert their existing ownership of approximately 35% of the issued and outstanding shares of Talen Energy’s common stock into shares of the surviving corporation. Upon consummation, the Riverstone Funds will own 100% of the outstanding common stock of Talen Energy. Consequently, the transaction will result in the indirect transfer of certain ownership interests in New Athens.
Talen and Riverstone announced the deal in a news release on June 3.