New York PSC okays ownership shuffle for 1,000-MW Cricket Valley project

The New York State Public Service Commission issued a Sept. 19 order approving a July 22 petition from Cricket Valley Energy Center LLC (Cricket Valley), Cricket Valley Energy Holdings LLC (CVEH Holdings), AP Cricket Valley Holdings II Inc. (Cricket Holdings II), APNA Holdings GmbH, 730 Cricket LLC, BlackRock Financial Management Inc. and ASG Frontier Holdings LLC.

These companies had requested issuance of a declaratory ruling that Public Service Law (PSL) §70 does not apply to:

  • Cricket Holdings II’s proposed sale of 16%-30% of the issued and outstanding membership interests in CVEH Holdings to 730 Cricket (the 730 Cricket Transaction);
  • Cricket Holding II’s proposed sale of 7.75%-15% of the issued and outstanding membership interests in CVEH to ASG Frontier (the ASG Frontier Transaction; collectively with the 730 Cricket Transaction, the Proposed Transactions);
  • potential future transfers by Cricket Holdings II to 730 Cricket of up to 3% of the issued and outstanding membership interests in CVEH Holdings (the 730 Cricket Additional Transfers); and
  • potential future transfers by Cricket Holdings II to ASG Frontier of up to 3% of the issued and outstanding membership interests in CVEH Holdings (the ASG Frontier Additional Transfers; together with the 730 Cricket Additional Transfers, the Additional Transfers).

The petition also sought a declaratory ruling that: a proposed intra-corporate reorganization does not require further review under PSL §70; the acquisition of indirect ownership interests in the Cricket Valley generation facility would not make either 730 Cricket, ASG Frontier, or BlackRock Management electric corporations within meaning of the PSL; and the future transfer of up to 15% of the issued and outstanding membership interests in CVEH Holdings to a currently-unknown third party investor in the facility (the “Future Transactions”) will not be subject to PSL review or require a filing with the Commission.

Cricket Valley is developing an approximately 1,000 MW combined cycle, natural gas-powered facility in the Town of Dover, New York. In February 2013, the Commission granted Cricket Valley a Certificate of Public Convenience and Necessity (CPCN) to construct, operate, and maintain the Facility, and established a lightened regulatory regime with respect to Cricket Valley’s ownership and operation of the Facility.

Said the Sept. 19 order: “In this ruling, the Commission determines that no further review under the PSL is required to be conducted of the Proposed Transactions, the Additional Transfers, or the intra-corporate reorganization described in the Petition. The Commission also finds that neither 730 Cricket, ASG Frontier, nor BlackRock Management will become electric corporations by virtue of acquiring purely passive indirect ownership interests in the Facility. Finally, the Commission declines to grant a declaratory ruling that the proposed future transfer of indirect ownership interests to an indeterminate buyer do not require future Commission review.”

Cricket Valley currently has three member owners. AP Cricket Valley Holdings I Inc. (Cricket Holdings I) holds a 40% interest, Cricket Holdings II holds a 40% interest, and MC CVEC Project Holdings I LLC (MC Holdings) holds a 20% interest. Cricket Holdings I is wholly owned by APNA Holdings GmbH (APNA), which is wholly-owned by Advanced Power AG (APAG). Cricket Holdings II is wholly-owned by AP Energy Holdings Inc., which is wholly-owned by APNA. MC Holdings is indirectly wholly-owned by Marubeni Corp. (Japan).

To facilitate financing for the facility, the commission recently issued a declaratory ruling that Cricket Holdings I, Cricket Holdings II, and MC Holdings may transfer 100% of their membership interests in Cricket Valley to CVEH Holdings, a new holding company that would wholly-own Cricket Valley after a proposed intra-corporate reorganization, without further review under PSL §70.2 When that reorganization is complete, Cricket Holdings I, Cricket Holdings II, and MC Holdings will each own the same percentage interest in CVEH Holdings that they previously held in Cricket Valley.

730 Cricket was formed for the purpose of owning membership interests in CVEH Holdings and is a wholly-owned, indirect subsidiary of Teachers Insurance and Annuity Association of America (TIAA).

BlackRock Management is a registered investment advisor that manages ASG Frontier, a company formed to own membership interests in CVEH Holdings. BlackRock Management is a wholly-owned subsidiary of BlackRock Inc., a publicly-traded investment management firm.

Funds managed by BlackRock’s Alternative Solutions Group, in partnership with BlackRock Real Assets, have entered an agreement to invest approximately 10% in this project, said BlackRock in an Aug. 16 announcement. BlackRock noted in the Aug. 16 statement that the project will utilize proven General Electric 7FA.05 combustion turbine generators. Construction of the plant is expected to begin in the fourth quarter of 2016 and to be completed in the fourth quarter of 2019.

“We’re pleased to partner with Advanced Power on Cricket Valley and we look forward to growing our relationship in the future,” stated David Giordano, Head of the North American Renewable Power Infrastructure team. “This transaction represents the strong growth in natural gas investment opportunities given the increased retirements in aging generation facilities, and will bring much needed generation capacity to the supply-constrained Hudson Valley region.”

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.