Ownership change sought for nearly-completed, 200-MW Cimarron Bend project

Filed Nov. 1 at the Federal Energy Regulatory Commission by Cimarron Bend Wind Project I LLC and its partially owned subsidiary, Cimarron Bend Assets LLC (CB Assets) was an application for necessary authorizations for a sale transaction.

Under this deal, EGPNA REP Wind Holdings LLC (REP Wind) will: form a newly-owned subsidiary (SubCo) controlled by REP Wind through its ownership of 100% of the controlling Class C membership interests in SubCo; cause SubCo to issue passive classes of membership interests to Enel Green Power North America Inc. (Enel NA) or an affiliate thereof, which also indirectly controls REP Wind, and an affiliate of GE Energy Financial Services Inc. (GE EFS), which also holds a passive interest in REP Wind through an affiliate; cause SubCo to indirectly acquire 100% of the Class A membership interests in Cimarron Bend; and through its ownership of the Class A membership interests in SubCo (which will own the controlling Class A membership interests in Cimarron Bend), indirectly acquire partial control over CB Assets.

The transaction is structured more specifically as follows: currently, Enel Kansas LLC owns 100% of the membership interests in Cimarron Bend Wind Holdings LLC (CB Holdings). CB Holdings owns 100% of the controlling Class A membership interests in Cimarron Bend Wind Holdings I LLC (CB Holdings I). The passive, non-controlling Class B membership interests in CB Holdings I will be held 100% in the aggregate by four tax equity investors, in a transaction for which the Section 203 application is pending before the commission.

CB Holdings I owns 100% of the membership interests in Cimarron Bend, which, in turn, owns 49% of the membership interests in CB Assets (the remaining 51% of which is owned by affiliates of Enel NA). The managing member of CB Assets, with the right to control on a day-to-day basis is Enel Kansas. It is intended that CB Assets will own a tie line and certain other interconnection assets for use by several wind projects, including Cimarron Bend.

In this transaction, SubCo will acquire, from Enel Kansas, 100% of the membership interests in CB Holdings. CB Holdings will continue to own the Class A membership interests in CB Holdings I, which will continue to own 100% of the direct interests in Cimarron Bend, as well as a partial, indirect interest in CB Assets.

REP Wind’s direct parent company is EGPNA Renewable Energy Partners LLC (REP), controlled by affiliates of Enel NA through the ownership of 100% of the controlling Class A membership interests and in which affiliates of GE EFS own 100% of the passive Class B membership interests.

Once the acquisition from Enel Kansas is completed, Enel NA will indirectly hold day-to-day control over Cimarron Bend and CB Assets and EFS Green Power Holdings LLC, an affiliate of GE EFS (EFS GPH) will hold indirect passive interests in Cimarron Bend and CB Assets. The transaction will have no impact on the tax equity investors’ Class B membership interests in CB Holdings I, and the tax equity investors will not change.

Applicants requested that the commission provide for a 21-day comment period and further request the issuance of an order approving the transaction as soon as possible, but in any event no later than Dec. 15, 2016, which will allow for closing of the transaction shortly thereafter.

Cimarron Bend owns a wind project with a nameplate rating of approximately 200 MW currently under development, which will be located in Clark County, Kansas. The Cimarron Bend Project, which will be located within the Sunflower Electric Power Corp. service territory within the Balancing Area Authority (BAA) of the Southwest Power Pool (SPP), is expected to begin testing during late November 2016 and to be completed during December 2016.

Cimarron Bend’s sole business will be the ownership and operation of the Cimarron Bend Project. Cimarron Bend has filed an application for market-based rate authority and has filed a notice of its status as an exempt wholesale generator. Cimarron Bend is committed to sell the Cimarron Bend Project’s entire 200 MW output under a 15-year power purchase agreement with Google Energy LLC. Cimarron Bend will not directly own any transmission facilities, other than limited interconnection facilities consisting of low-voltage collector lines that connect the Cimarron Bend Project’s wind turbine generators to a project substation. From the project substation, the Cimarron Bend Project will interconnect with the SPP-controlled grid using generator interconnection facilities that are owned and operated by Cimarron Bend’s partially-owned subsidiary, CB Assets.

One hundred percent (100%) of Cimarron Bend’s membership interests are owned by CB Holdings I. All of the Class A membership interests in CB Holdings I are owned by CB Holdings. CB Holdings is currently designated as the Managing Member that has the right to control CB Holdings I, and indirectly to control Cimarron Bend and CB Assets on a day-to-day basis.

CB Holdings is currently wholly owned and controlled by Enel Kansas. Enel Kansas is wholly owned by Enel NA. Enel NA is a wholly-owned subsidiary of Enel Green Power SpA, an Italian company.

Cimarron Bend has filed an application before the commission seeking approval to authorize certain tax equity investors to acquire the Class B interests in Cimarron Bend. This new transaction will have no effect on the tax equity 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.