Capital One N.A. applied Nov. 17 with the Public Utility Commission of Texas for approval of the purchase of passive equity interests (also referred to as “Class A interests”) in Mariah del Norte LLC from HSBC USA Inc.
Mariah has an approximately 230-MW wind project in Parmer, Castro and Deaf Smith counties, Texas. It is interconnected into the Electricity Reliability Council of Texas (ERCOT) system, with Sharyland Utilities LP as its transmission service provider. The project is anticipated to commence full commercial operation before the end of this year.
HSBC owns 23.3% of the Class A passive equity interests in Mariah. Under a purchase agreement between HSBC and Cap One, Cap One intends to purchase HSBC’s Class A passive interests in Mariah.
Cap One noted: “As HSBC is a passive equity interest holder, it is unclear that approval of the Transaction is necessary in this instance because the sale of passive equity interests in Mariah between passive investors does not cause Mariah to ‘become affiliated with’ Cap One. However, because the Commission has declined in previous cases to consider whether approval is necessary, Cap One is requesting approval out of an abundance of caution.”
Authority to manage, direct or control the day-to-day operations of Mariah will be retained by the holders of the Class B managing interests. Cap One, either directly or through its affiliates, only holds limited passive interests in other generation in ERCOT, totaling 18.6 MW, or that theoretically could be capable of delivery to ERCOT.
Mariah del Norte LLC on May 31 had applied at the Texas commission for approval of the issuance of passive equity interests (also referred to as “Class A interests”) in Mariah to MidAmerican Wind Tax Equity Holdings LLC, Citicorp North America and HSBC USA.