Texas commission okays outside investment in NextEra wind company

The Public Utility Commission of Texas on Nov. 14 issued a final order approving an application from Monarch Wind LLC for covering the issuance of Class B passive equity interests to JPM Capital Corp. (JPMCC) and EFS Renewables Holdings LLC.

On Aug. 17, Monarch filed this application for approval of the issuance of Class B interests in Monarch to these investors. NextEra Energy Resources LLC indirectly owns 100% of the equity interests in Monarch, which in turn owns a portfolio of wind generation assets, which portfolio includes indirect ownership of Javelina Wind Energy II LLC. This project company owns, operates, and maintains a 200-MW wind facility located in Webb County that is interconnected into the Electric Reliability Council of Texas (ERCOT) system.

Through the transaction, Monarch intends to issue passive Class B interests in Monarch to the investors, while the equity interests indirectly held by NextEra Energy Resources will be Class A managing interests.  As passive equity interest holders, the investors will have no management or control over Monarch, the project company, or the sale of electricity by the project company.

JPMCC currently owns, either directly or indirectly through affiliates or subsidiaries, passive equity interests in installed generation capacity in ERCOT totaling approximately 141.59 MW. EFS currently owns or will own, either directly or indirectly through affiliates or subsidiaries, passive equity interests in installed generation capacity in ERCOT totaling approximately 170.2 MW.

Following the close of the proposed transaction, the combined generation capacity ownership of Monarch, including its affiliates and upstream ownership, as well as that of the investors and their affiliates or subsidiaries, located in or capable of delivery to ERCOT will total 1,412.77 MW. Based upon the total installed capacity in ERCOT of 90,765 MW, Monarch’s and investors’ combined percentage share of installed generation capacity in or capable of delivery to ERCOT as a result of the transaction will be 1.56%.

Javelina Wind Energy II LLC told the Texas commission in a Sept. 20 registration as a renewable energy credit producer that its 200-MW wind project is due for commercial operation on Nov. 11 of this year. The brief filing lists all one hundred General Electric 2-MW wind turbines that make up this project, with each shown as due to go commercial on Nov. 11.

FERC application made related to this transaction

Notable is that Rush Springs Wind Energy LLC on Oct. 7 applied with the Federal Energy Regulatory Commission for approval of the sale of certain indirect, non-managing interests in the wind project developer to JPMCC or an affiliate, and EFS Renewables Holdings LLC (GE EFS). The FERC filing said these two investors will acquire 100% of the Class B Membership Interests in Monarch Wind LLC, which will own 100% of the membership interests in Rush Springs. The Class B Membership Interests to be acquired are passive tax equity interests, and will not give the Investors a voice in the day-to-day public utility activities of the applicant except for those veto and consent rights necessary to allow Investors to protect their investment in the applicant.

Rush Springs Wind requested that the commission provide for a 21-day comment period and issue an order approving the transaction no later than Nov. 28.

Rush Springs will own and operate a wind farm with a nameplate capacity of approximately 249.9 MW located in Grady and Stephens counties, Oklahoma, within the Southwest Power Pool (SPP) balancing authority area (BAA). Rush Springs is party to a generator interconnection agreement (GIA) with SPP and AEP Oklahoma Transmission, and may start producing test energy in October 2016.

The facility’s power will be sold into the SPP market, with separate contracts-for-differences with Owens Corning and Equinix for 100% of the output of the facility. Rush Springs is an exempt wholesale generator (EWG) and is authorized by the commission to sell power at market-based rates.

This project company part of NextEra Energy Resources LLC, which is part of NextEra Energy (NYSE: NEE). JPMCC is an indirect, wholly-owned subsidiary of JPMorgan Chase & Co., an international financial services company. GE EFS is a wholly-owned subsidiary of Aircraft Services Corp., which is part of General Electric (NYSE: GE).

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.