The Federal Energy Regulatory Commission on Nov. 2 approved an Aug. 30 application from Elwood Energy LLC, Dynegy Inc. (NYSE: DYN) and its public utility subsidiaries, and J-POWER USA Generation LP and its public utility subsidiaries for authorization for a transaction whereby Dynegy will sell its indirect ownership interests in Elwood to J-POWER North American Holdings Co. Ltd.
Elwood owns the Elwood Facility, a 1,350-MW natural gas-fired facility located in Will County, Illinois, within the PJM Interconnection market. Elwood is 50% indirectly owned and controlled by J-POWER USA. The other 50% of Elwood is owned and controlled by Tomcat Power LLC, which in turn is wholly owned by Dynegy.
J-POWER Investment Co. Ltd. (J-POWER Investment) and John Hancock hold direct 49.9% and 50% limited partner interests in J-POWER USA, respectively. J-POWER USA Generation GP LLC, a direct, wholly owned subsidiary of J-POWER Investment, holds an indirect general partner interest in J-POWER USA of 0.1%.
J-POWER is a wholly owned subsidiary of Electric Power Development Co. Ltd. (Japan), a corporation organized under the laws of Japan (J-POWER Japan).
John Hancock owns a 50% passive, non-managing member interest in J-POWER USA, which gives John Hancock limited voting and consent rights solely with respect to financial and economic matters necessary to protect its investment.
The applicants stated that this transaction does not raise any horizontal competition issues. J-POWER USA is already affiliated with Elwood, therefore J-POWER USA will not obtain “ownership or control over the generating facilities of previously unaffiliated merging entities” as a result of the transaction.
Dynegy had announced Aug. 3 that it signed a definitive agreement to sell its 50% equity interest in the Elwood Energy Facility to its partner, J-Power USA, for $172.5 million in cash. At closing, approximately $35 million in previously posted collateral will be returned to Dynegy, and the non-recourse asset level financing currently in place will remain with the new owner. Dynegy said the sale is expected to close in the fourth quarter.
