Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
WASHINGTON, Feb. 1 -- The U.S. Department of Energy'sFederal Energy Regulatory Commission issued the text of the following delegated order:
Blue Canyon Windpower LLC
Docket No. EC13-58-000
ORDER AUTHORIZING DISPOSITION OF JURISDICTIONAL FACILITIES
On January 2, 2013, Blue Canyon Windpower LLC (Blue Canyon or Applicant) filed an application pursuant to section 203 (a)(1)(A) of the Federal Power Act (FPA) requesting Commission authorization for the disposition of jurisdictional facilities resulting from the transfer of a 25 percent direct managing membership interest in Blue Canyon from EDP Renewables North America LLC (EDP Renewables) to Threshold Power Corporation or an affiliate of Threshold Power Corporation (Threshold Power) (Transaction). The jurisdictional facilities affected by the Transaction are Blue Canyon's market-based rate tariff, related agreements, interconnection equipment, and various books and records.
Blue Canyon is a Texas limited liability company that owns and operates a 74.25 megawatt wind-powered electric generation facility located in Comanche and Caddo Counties, Oklahoma (Blue Canyon Facility). The Blue Canyon Facility is interconnected to the transmission system owned by Western Farmers Electric Cooperative (WFEC) and operated by Southwest Power Pool, Inc. All of the output from the Blue Canyon Facility is committed to WFEC under a long-term power purchase agreement. Blue Canyon is an exempt wholesale generation and authorized to sell energy and capacity at market-based rates.
Blue Canyon has two classes of membership interests, Class A non-managing membership interests and Class B managing membership interests. All of the Class A non-managing membership interests are held by FC Energy Finance I, Inc., KEF Equity Investment Corp., and Northwestern Mutual Life Insurance Company. EDP Renewables currently owns 25 percent of the Class B managing membership interests in Blue Canyon. EDP Renewables is a Delaware limited liability company that develops, owns, and operates, through wholly or partially-owned subsidiaries, wind-powered electric generation facilities throughout the United States. The remaining Class B membership interests are held by Blue Canyon 1 Member LLC, an Infigen Energy US LLC company (Infigen BC1), and Acciona Wind Energy USA LLC (Acciona Wind USA).
Threshold Power is a Delaware Corporation and an independent power producer that was formed to invest in operational clean energy assets. Threshold Power expects to consummate the Transaction by forming a wholly-owned Delaware limited liability company, to be called Threshold Wind I, LLC (Threshold Wind I), in which Threshold Power is the sole managing member.
Threshold Wind I, in turn, will form a wholly-owned Delaware limited liability company, to be called Threshold Holdings III, LLC (Threshold Holdings III), in which Threshold Wind I is the sole managing member.
Following the consummation of the Transaction, Threshold Holding III will
directly own 25 percent of the Class B managing membership interests in Applicant.
Threshold Power is a wholly-owned subsidiary of Threshold Power Holdings, Inc. (Can Holdco), which is an Ontario corporation. Can Holdco is a wholly-owned subsidiary of Threshold Power Trust (Trust), an unincorporated open-ended limited purpose trust established under the laws of the Province of Ontario, Canada for the purpose of acquiring equity interests in power projects within the United States.
Threshold Power currently does not own or control any electric generation located in the Applicant's relevant market, the WFEC balancing authority area (BAA). Applicant states that Threshold Power has entered into an agreement to acquire certain passive equity in six public utilities, including a portion of the Class A non-managing membership interest in Blue Canyon. Applicant notes that, with the exception of the Blue Canyon Facility, that transaction does not involve any electric generating facilities or inputs to generation located in the WFEC BAA or transmission assets other than the limited equipment necessary to connect individual generating facilities to the transmission grid.
Applicant also states that neither Threshold Power nor any of its affiliates owns or controls any electric transmission or distribution facilities used for the transmission of electricity in interstate commerce in the United States, except for limited equipment necessary to connect individual generating facilities to the integrated transmission grid. Applicant states that neither Threshold Power nor any of its affiliates owns or controls any inputs to generation in the United States. Threshold Power is not affiliated with any public utility with a franchised electric service territory in the United States.
Trust is owned 6.296 percent by Persimmon Tree Capital Fund, L.P., a Delaware limited partnership (Persimmon Tree Capital Fund), which is owned by an individual trust, which does not, as a limited partner, exercise control over Persimmon Tree Capital Fund, and by its general partner, Persimmon Tree Capital Associates, LLC, a Delaware limited liability company ( Persimmon Tree Capital Associates), which exercises sole control over Persimmon Tree Capital Fund. Persimmon Tree Capital Management, LLC, a Delaware limited liability company, is the manager of Persimmon Tree Capital Associates, which, together with Persimmon Tree Capital Associates, is owned by two individuals, Alexis G. Sant and Jason A. Hicks. None of the Persimmon entities or these individuals own, or have the power to vote shares or ownership interests of, more than 10 percent of, or otherwise control, any jurisdictional public utility or holding company.
In addition, Trust is owned 6.296 percent by the Roger W. Sant Revocable
Living Trust, as to which Roger W. Sant and Victoria P. Sant are trustees.
Trust also is owned 44.073 percent by NGEN III, L.P. a Delaware limited partnership (NGEN III). NGEN III is owned by corporations, foundations, families, and institutional investors, none of which exercise control over NGEN III. NGEN III is managed by its general partner, NGEN Holdings, LLC, a Delaware limited liability company, 20 percent of which is owned by MS Venture Capital Holding Inc., a Delaware corporation, and 80 percent of which is owned by the following individuals: Peter Grubstein, Steve Parry, Rosemary Ripley, Robb Mclarty, Zubin Canteenwalla, and Valeska Watters.
NGEN III owns 0.9 percent of Alterra Power Corporation (Alterra), which is a publicly traded Ontario corporation listed on the Toronto Stock Exchange.
NGEN III holds a passive, indirect interest, through Alterra, in six power plants located outside of Applicant's relevant market. NGEN III owns 29 percent of Tioga Energy, Inc., a Delaware corporation (Tioga Energy). NGEN III holds a passive, indirect interest, through Tioga Energy, in roof-mounted solar power generation projects located outside of Applicant's relevant market.
The Trust is also owned by three individuals, Susan D. Nickey (21.617 percent), Elizabeth J. Young (13.071 percent), and Martin C. Crotty (8.647 percent). Threshold Power Administrator Inc., an Ontario corporation (Administrator), which is the administrator of the Trust, owns a negligible interest in the Trust as well. Susan D. Nickey is the sole shareholder of Administrator. None of these individuals or the Administrator owns more than a 10 percent interest in or otherwise controls any jurisdictional public utility or holding company.
According to the application, Threshold Power will acquire all of EDP Renewables' Class B managing membership interests in Blue Canyon. Following the Transaction, Threshold Power will hold a 25 percent direct managing membership interest in Blue Canyon. The remaining Class B managing membership interests in Blue Canyon will continue to be owned by Infigen BC1 and Acciona Wind USA. The Class A non-managing membership interests in Blue Canyon held by passive tax equity investors will not be affected by the Transaction. EDP Renewables will no longer hold any ownership interest in Blue Canyon following the Transaction.
Applicant states that the Transaction is consistent with the public interest and will not adversely affect competition, rates or regulations. With respect to competition, Applicant states that the Transaction will have no adverse effect on horizontal market power. Applicant states that neither Threshold Power or any of its affiliates currently owns or controls any electric generation capacity in the relevant market, the WFEC BAA.
Therefore, Applicant asserts that the Transaction will not result in any new combination of electric generating assets that could have an impact on the competitive situation in the relevant market.
In addition, Applicant states that the Transaction will have no adverse effect on vertical market power. Applicant states that Threshold Power and its affiliates do not own or control any electric transmission or distribution facilities in the United States, other than the limited interconnection facilities required to connect individual generating facilities to the transmission grid. Applicant also states that Threshold Power and its affiliates do not own or control any inputs to electric power production located in the relevant market.
With respect to rates, Applicant states that the Transaction will have no adverse effect on rates. Applicant's rates will continue to be market-driven, rather than cost-based. Applicant states that it currently sells all of the output of its facility under a long-term agreement with WFEC.
Applicant notes that the Transaction does not involve transmission rates or transmission customers. Therefore, Applicant concludes that the Transaction will have no adverse effect on wholesale ratepayers or transmission customers.
With respect to regulation, Applicant states that the Transaction will not affect the manner or extent to which the Commission, any state, or any other federal agency may regulate Applicant and its affiliates. Applicant also states that the extent to which Blue Canyon and its affiliates are subject to the jurisdiction of the Commission (or any other regulatory agency or office) will not change as a result of the Transaction.
Applicant states that the Transaction will not result in cross-subsidization of a non-utility associate company or the pledge or encumbrance of utility assets for the benefit of an associate company. Applicant asserts that the Transaction falls within one of the "safe harbors" adopted by the Commission for which detailed explanation and evidentiary support to demonstrate a lack of cross-subsidization is not required. Applicant more specifically states that the Transaction does not involve a franchised public utility with captive customers.
Additionally, Applicant verifies that based on the facts and circumstances known to them or that are reasonably foreseeable, the Transaction will not result in, at the time of the Transaction or in the future: (1) any transfer of facilities between a traditional public utility associate company that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, and an associate company; (2) any new issuance of securities by a traditional public utility associate company that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, for the benefit of an associate company; (3) any new pledge or encumbrance of assets of a traditional public utility associate company that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, for the benefit of an associate company; or (4) any new affiliate contract between a non-utility associate company and a traditional public utility associate company that has captive customers or that owns or provides transmission service over jurisdictional transmission facilities, other than non-power goods and services agreements subject to review under Sections 205 and 206 of the FPA.
This filing was noticed on January 2, 2013, with comments, protests or interventions due on or before January 23, 2013. None were filed. Notices of intervention and unopposed timely filed motions to intervene are granted pursuant to the operation of Rule 214 of the Commission's Rules of Practice and Procedure (18 C.F.R. section 385.214). Any opposed or untimely filed motion to intervene is governed by the provision of Rule 214.
When a controlling interest in a public utility is acquired by another company, whether a domestic company or a foreign company, the Commission's ability to adequately protect public utility customers against inappropriate cross-subsidization may be impaired absent access to the parent company's books and records. Section 301(c) of the FPA gives the Commission authority to examine the books and records of any person who controls, directly or indirectly, a jurisdictional public utility insofar as the books and records relate to transactions with or the business of such public utility. The approval of the transaction is based on such examination ability.
Information and/or systems connected to the bulk power system involved in this Transaction may be subject to reliability and cybersecurity standards approved by the Commission pursuant to FPA section 215. Compliance with these standards is mandatory and enforceable regardless of the physical location of the affiliates or investors, information databases, and operating systems. If affiliates, personnel or investors are not authorized for access to such information and/or systems connected to the bulk power system, a public utility is obligated to take the appropriate measures to
deny access to this information and/or the equipment/software connected to the bulk power system. The mechanisms that deny access to information, procedures, software, equipment, etc., must comply with all applicable reliability and cybersecurity standards.
The Commission, NERC or the relevant regional entity may audit compliance with reliability and cybersecurity standards.
Order No. 652 requires that sellers with market-based rate authority timely report to the Commission any change in status that would reflect a departure from the characteristics the Commission relied upon in granting market-based rate authority. The foregoing authorization may result in a change in status. Accordingly, Applicants are advised that it must comply with the requirements of Order No.652. In addition, Applicants shall make appropriate filings under section 205 of the FPA, to implement the Transaction.
After consideration, it is concluded that the proposed Transaction is consistent with the public interest and is hereby authorized, subject to the following conditions:
(1) The Transaction is authorized upon the terms and conditions and for the purposes set forth in the application;
(2) The foregoing authorization is without prejudice to the authority of the Commission or any other regulatory body with respect to rates, service, accounts, valuation, estimates or determination of cost or any other matter whatsoever now pending or which may come before the Commission;
(3) Nothing in this order shall be construed to imply acquiescence in any estimate or determination of cost or any valuation of property claimed or asserted;
(4) The Commission retains authority under sections 203(b) and 309 of the FPA, to issue supplemental orders as appropriate;
(5) If the Transaction results in changes in the status or the upstream ownership of Applicant's affiliated Qualifying Facilities, if any, an appropriate filing for recertification pursuant to 18 C.F.R. section 292.207 shall be made;
(6) Applicant shall make appropriate filings under section 205 of the FPA, as necessary, to implement the proposed Transaction;
(7) Applicant must inform the Commission of any changes in circumstances that would reflect a departure from the facts the Commission relied upon in authorizing the Transaction; and
(8) Applicant shall notify the Commission within 10 days of the date that the disposition of jurisdictional facilities has been consummated.
This action is taken pursuant to the authority delegated to the Director, Division of Electric Power Regulation - West under 18 C.F.R. section 375.307. This order constitutes final agency action. Requests for rehearing by the Commission may be filed within 30 days of the date of issuance of this order pursuant to 18 C.F.R. section 385.713.
Steve P. Rodgers
Division of Electric Power Regulation - West
TNS CT21CT-130202-4188569 61ChengTacorda