FERC okays ownership changes for two gas-fired plants in Georgia

The Federal Energy Regulatory Commission on Sept. 1 approved a June 30 application from Effingham County Power LLC (Effingham), SEPG Energy Marketing Services LLC (SEMS) and Washington County Power LLC (Washington) related to changes in control of two gas-fired power plants.

This multi-step transaction includes:

  • the termination of a lease agreement between Effingham and the Effingham County Industrial Authority (ECIA) pursuant to which Effingham currently leases and operates a power plant and associated interconnection equipment (the Effingham Facility) owned by ECIA, and the transfer of ownership of the Effingham Facility from ECIA to Effingham (called the Effingham Unwinding Transaction);
  • the termination of a lease agreement between Washington and the Development Authority of Washington County (DAWC) pursuant to which Washington currently leases and operates a power plant and associated interconnection equipment (the Washington Facility) owned by DAWC, and the transfer of ownership of the Washington Facility from DAWC to Washington (the Washington Unwinding Transaction);
  • the contribution of 100% of the direct membership interests in SEMS by CPP SEPG Holdings LLC (CPP SEPG Holdings) to Mackinaw Power LLC (Mackinaw Power) (the SEMS Contribution Transaction), followed by the transfer of Units 1 and 4 of the Washington Facility, including a pro rata share of related interconnection facilities, and related tolling agreements from Washington to SEMS (the Washington Separation Transaction); and
  • the distribution of 100% of the direct membership interests in SEMS from Mackinaw Power to a newly formed holding company (Holdco) (the SEMS Distribution Transaction).

FERC noted in the Sept. 1 order: “Applicants state that the Transactions may not require Commission authorization under FPA section 203 (a); they nevertheless ask the Commission to authorize the Transactions. This order authorizes the Transactions without making any determination of jurisdiction.”

Effingham is a wholly owned, indirect subsidiary of Southeast PowerGen LLC (SEPG), which is a wholly owned, direct subsidiary of Southeast PowerGen Holdings LLC (SEPG Holdings). SEPG Holdings is directly owned by CPP SEPG Holdings LLC (CPP SEPG) (75.05%) and EFS Southeast PowerGen (EFS SEPG) (24.95%).

Effingham leases and operates an approximately 597-MW combined cycle, natural gas-fired facility (Effingham Facility) located in Rincon, Georgia. The Effingham Facility is owned by ECIA and leased to Effingham pursuant to an industrial revenue bond financing arrangement. The Effingham Facility is interconnected to the transmission system owned and operated by Georgia Power located within the Southern Company Services (SOCO) balancing authority area. The entire output of the Effingham Facility is sold on a merchant basis into the wholesale market.

SEMS is a wholly owned, direct subsidiary of CPP SEPG. SEMS was formed to operate as a marketer of capacity, energy, and ancillary services in the United States. SEMS does not own or control any electric generation facilities, any electric transmission or distribution facilities, or any essential inputs to electricity products or electric power production.

Washington is a wholly owned, direct subsidiary of Mackinaw Power, which is a wholly owned, indirect subsidiary of SEPG. Washington leases and operates an approximately 796-MW simple cycle, natural gas-fired facility (Washington Facility) located in Linton, Georgia. The Washington Facility is owned by DAWC and leased to Washington pursuant to an industrial revenue bond financing arrangement. The Washington Facility is interconnected to the transmission system owned by Georgia Power located within the SOCO balancing authority area. The output of Units 1 and 4 of the Washington Facility is sold to Central Georgia Electric Membership Corp. and Snapping Shoals Electric Membership Corp. pursuant to long-term tolling agreements in effect through Dec. 31, 2035. The output of Units 2 and 3 of the Washington Facility is sold to Georgia Power under long-term tolling agreements that extend through May 31, 2024.

CCP SEPG’s membership interests are owned by Cogentrix Southeast Gen Holdings LLC (CSGH), Carlyle Power Partners II-C LP (CPP II-C) and Cogentrix Southeast Gen CPOCP Holdings LLC (CSGH CPOCP). CSCH, CPP II-C, and CSGH CPOCP are owned and managed by their members, all of which are investment funds vehicles sponsored and managed by The Carlyle Group LP. Carlyle Group is a global alternative investment management firm that is a publicly traded entity listed on NASDAQ.

EFS SEPG is wholly owned by EFS Renewables Holdings LLC, which is wholly owned by Aircraft Services Corp., which is part of General Electric (NYSE: GE).

  • Under the Effingham Unwinding Transaction, the lease agreement between Effingham and ECIA will be terminated and ownership of the Effingham Facility will be transferred to Effingham. Effingham will remain a wholly owned, indirect subsidiary of SEPG Holdings.
  • Under the Washington Unwinding Transaction, the lease agreement between Washington and DAWC will be terminated and ownership of the Washington Facility will be transferred to Washington. Washington will remain a wholly owned, indirect subsidiary of SEPG Holdings.
  • Under the SEMS Contribution Transaction, CPP SEPG will transfer 100% of the membership interests in SEMS to Mackinaw Power through a series of simultaneous membership contributions. As a result, SEMS will be a wholly owned subsidiary of SEPG Holdings.
  • Subsequently, Washington will transfer Units 1 and 4 of the Washington Facility, including a pro rata share of related interconnection facilities and the tolling agreements to SEMS pursuant to the Washington Separation Transaction. Units 2 and 3 of the Washington Facility will not be affected by the Washington Separation Transaction. Following the Washington Separation Transaction, Mackinaw Power will transfer 100% of the membership interests in SEMS to HoldCo through a series of simultaneous membership distributions and contributions.
  • Because SEMS will be a wholly owned, indirect subsidiary of SEPG Holdings following the SEMS Distribution Transaction, the ultimate upstream ownership of Units 1 and 4 of the Washington Facility will not change as a result of the Washington Separation Transaction or SEMS Distribution Transaction.
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.