FERC okays Riverstone takeover of all of Talen Energy

The Federal Energy Regulatory Commission on Oct. 19 approved a July 15 application from Raven Power Holdings LLC, C/R Energy Jade LLC, Sapphire Power Holdings LLC (collectively called the “RJS Entities”) and Talen Energy covering the merger of Raven, Jade and Sapphire into Talen.

The facilities associated with the now-approved transaction include market-based rate tariffs, reactive power tariffs, long-term power sale agreements, common facilities agreements, and related agreements, books and records.

Approximately 99% of the Class A Units of Raven are owned by Riverstone V Raven Holdings LP, and certain individuals collectively own less than 1% of the Class A Units and all of the Class B Units. The Class A Units constitute the voting interests in Raven.

Riverstone V Raven Holdings is controlled by its general partner, Riverstone Energy Partners V LP (Riverstone GP). The general partner of Riverstone GP is Riverstone Energy GP V LLC. Riverstone GP V is 100% owned by Riverstone Energy GP V Corp.

Over 90% of the Class A Units of Jade are owned by investment vehicle affiliates of Carlyle/Riverstone Global Energy and Power Fund III LP that are controlled by Carlyle/Riverstone Energy Partners III LP (Fund III GP).

There are two entities that collectively own less than 10% of the Class A Units of Jade, which applicants represented as constituting the voting interests in Jade. Applicants stated that control over the management and day-to-day operation of Jade is exercised entirely by its directors, all of whom are appointed by Riverstone Holdings LLC.

All of the Class A Units in Sapphire are held by R/C Sapphire Power IP LP (RC Sapphire). Sapphire’s Class B Units are owned by a group of individuals. RC Sapphire is controlled by its general partner, Riverstone/Carlyle Renewable Energy Partners II LP, whose general partner and controlling entity is R/C Renewable Energy GP II LLC. The sole member of R/C Renewable Energy GP II is Riverstone.

Talen, through its subsidiary, Talen Energy Supply LLC, is a competitive energy and power generation and marketing company located in Allentown, Pennsylvania. Talen produces and sells electricity, capacity and ancillary services from its fleet of power plants totaling approximately 16,000 MW of generating capacity located across the United States.

Talen and its subsidiaries are affiliated with the RJS Entities and its subsidiaries through Riverstone Holdings LLC. The RJS Entities currently hold 35% of the outstanding common stock of Talen. This transaction would increase the RJS Entities’ ownership of Talen to 100%.

The merger agreement was announced on June 3. Talen Energy noted in an Oct. 19 statement that its stockholders approved the proposed merger at a special meeting of stockholders on Oct. 6. An application to approve the transaction is pending before the Nuclear Regulatory Commission. The transaction remains on schedule to close by the end of 2016, subject to receipt of NRC approval and satisfaction of other customary closing conditions.

Riverstone is an energy and power-focused private investment firm founded in 2000 by David M. Leuschen and Pierre F. Lapeyre, Jr.with approximately $34 billion of equity capital raised. Riverstone conducts buyout and growth capital investments in the exploration & production, midstream, oilfield services, power and renewable sectors of the energy industry. With offices in New York, London, Houston and Mexico City, the firm has committed approximately $30 billion to more than 120 investments in North America, Latin America, Europe, Africa and Asia.

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.