FERC Issues Order Authorizing Disposition of Jurisdictional Facilities re Prairie Breeze Wind Energy LLC Under EC14-31

WASHINGTON, Dec. 18 -- The U.S. Department of Energy'sFederal Energy Regulatory Commission issued the text of the following delegated order:

Prairie Breeze Wind Energy LLC

Docket No. EC14-31-000

ORDER AUTHORIZING DISPOSITION OF JURISDICTIONAL FACILITIES

(Issued December 18, 2013)

On November 18, 2013, Prairie Breeze Wind Energy LLC (Prairie Breeze) filed an application under section 203(a)(1)(A) of the Federal Power Act (FPA) requesting Commission authorization for the disposition of jurisdictional facilities. Specifically, the Proposed Transaction entails (i) each of JPM Capital Corporation (JPM Capital), EFS Prairie Breeze, LLC (EFS Prairie Breeze), and BAL Investment & Advisory, Inc. (BALIA) or a wholly-owned subsidiary of BALIA (BALIA Subsidiary) (collectively, Class A Investors) acquiring Class A membership interests, which are passive and non-controlling, in Prairie Breeze Holdings LLC (PB Holdings); and (ii) Prairie Breeze Class B Holdings LLC (Class B Holdings) and Beech Ridge Investment Corporation (Beech Ridge) exchanging or converting their membership interests in PB Holdings to Class B membership interests. The affected jurisdictional facilities consist of a market-based rate tariff, agreements, interconnection facilities, and related books and records.

Prairie Breeze, an exempt wholesale generator, is developing and will construct, own, and operate a 200.6 megawatt (MW) wind-powered generating facility (Facility) to be located near Petersburg, Nebraska and within the control area of the Nebraska Public Power District (NPPD). Thus, according to Prairie Breeze, the NPPD control area is the relevant market for the Facility. Prairie Breeze has entered into a long-term power sales agreement in which it will sell, at wholesale, all of the power produced by the Facility to Omaha Public Power District.

Prairie Breeze is a direct wholly-owned subsidiary of PB Holdings. PB Holdings is directly owned 99 percent by Class B Holdings and the remaining 1 percent by Beech Ridge. Class B Holdings and Beech Ridge are each indirectly wholly owned by Invenergy Wind, LLC, (Invenergy Wind) which, in turn, is indirectly majority-owned by Invenergy Investment Company LLC (Invenergy Investment) and indirectly minority-owned by Liberty Structured Holdings, LLC (Liberty Holdings). Invenergy Investment, a developer, owner, and operator of electric generation and transmission facilities in the United States and abroad, indirectly owns the controlling membership interests in Invenergy Wind. Liberty Holdings, primarily engaged in the insurance business, holds an indirect passive and non-controlling interest in Invenergy Wind. According to Prairie Breeze, other than the indirect interests in Prairie Breeze, none of Invenergy Investment, Polsky Energy, Liberty Holdings, or their respective subsidiaries or affiliates owns or controls operating generation or transmission facilities within the NPPD control area.

JPM Capital is an indirect, wholly-owned subsidiary of JPMorgan Chase & Co. (JPMorgan Chase), a financial service company. According to Prairie Breeze, JPM Capital and JPMorgan Chase are not primarily engaged in energy-related business activities and do not directly own or control any electric generating or transmission assets or generation output. JPMorgan Chase indirectly owns interests in electric generation facilities in various markets across the United States, but none of these energy affiliates own voting interests of 10 percent or more in any generating facilities located in the NPPD control area. Furthermore, neither JPMorgan Chase nor its affiliates owns or controls inputs to electric generation located in the NPPD control area.

EFS Prairie Breeze is an indirect, wholly-owned subsidiary of General Electric Company (GE). According to Prairie Breeze, GE, through its subsidiaries, is a passive owner of, and investor in, a number of generating facilities in the United States. Several affiliates of GE have non-passive interests in generating facilities or in entities that own or control generating facilities in the United States, but none of these entities are located in the NPPD control area. Except for interests that GE holds in a transmission system located outside the NPPD control area, neither GE nor any of its affiliates owns or controls, other than limited interconnection equipment, any transmission facilities in the United States.

BALIA is an indirect, wholly-owned subsidiary of Bank of America Corporation (Bank of America), a bank holding company and a financial holding company.

BALIA Subsidiary will be a special purpose vehicle wholly-owned and controlled by BALIA. According to Prairie Breeze, the BALIA Investor and Bank of America are not primarily engaged in energy-related business activities and do directly own or control any electric generating or transmission assets or generation output. None of the BALIA Investor or its affiliates own any transmission, except for limited interconnection equipment. BALIA Investor is affiliated with entities that own interests in electric generation facilities in various markets across the United States, but none of the entities own voting interests of 10 percent or more in any generating facilities located in the NPPD control area.

Under the Proposed Transaction, each of JPM Capital, EFS Prairie Breeze, and the BALIA Investor will acquire 35.37 percent , 35.37 percent, and 29.26 percent, respectively, of the passive, non-controlling Class A membership interests in PB Holdings. In addition, each of Class B Holdings and Beech Ridge will exchange or convert its existing membership units in PB Holdings for 99 percent and 1 percent, respectively, of the Class B membership interests in PB Holdings. Prairie Breeze states that the Class A membership interests will provide JPM Capital, EFS Prairie Breeze, and the BALIA Investor with only veto and/or consent rights needed to protect their investment interests, and that none of them will be the managing member of, or have control over, PB Holdings or Prairie Breeze. Class B Holdings, which will be the owner of 99 percent of the Class B membership interests, will be the managing member of PB Holdings and will control PB Holdings. Class B Holdings will directly, and Invenergy Investment will indirectly, continue to own the controlling interests in PB Holdings and, indirectly, in Prairie Breeze.

Prairie Breeze states that the Proposed Transaction is consistent with the public interest and will have no adverse effect on competition, rates, or regulation. With respect to horizontal market power, Prairie Breeze states that the Proposed Transaction raises no concerns. Prairie Breeze asserts that the Proposed Transaction involves only the transfer of passive, non-controlling interests and thus will not result in the Class A Investors being considered as affiliates of Prairie Breeze or to provide them with control of Prairie Breese or its generation. Prairie Breeze also states that none of the Class A Investors currently owns or controls any electric generation in the NPPD control area. Furthermore, Prairie Breeze states that the Facility's output is fully committed under a long-term agreement, including the output of the Steele Flats Facility.

With regard to vertical market power, Prairie Breeze states that the Proposed Transaction raises no concerns. Prairie Breeze asserts that none of the Class A Investors nor any of their affiliates own or control within the NPPD control area any electric transmission facilities; any intrastate natural gas or coal transportation, storage or distribution facilities; or any other inputs to electricity products.

With regard to rates, Prairie Breeze states that the Proposed Transaction will not have an adverse effect. Prairie Breeze states that it has filed for market-base rate authority, and that it will sell power to its customers pursuant to negotiated rates under its market-based rate tariff filed with the Commission. Prairie Breeze also asserts that the Proposed Transaction will not affect the rates that Prairie Breeze will be authorized to charge under its market-based tariff. In addition, Prairie Breeze states that it does not provide transmission services and, therefore, it has no transmission customers.

With regard to regulation, Prairie Breeze states that the Proposed Transaction will not have an adverse effect. Prairie Breeze states that once it becomes jurisdictional, that status will not change as a result of the Proposed Transaction.

Prairie Breeze states that, based on facts and circumstances known to it or that are reasonably foreseeable, the Proposed Transaction will not result in, at the time of the closing or in the future, cross-subsidization of a non-utility associate company or the pledge or encumbrance of assets of a traditional public utility that has captive customers or that owns or provides transmission service over jurisdictional facilities for the benefit of an associate company. Specifically, Prairie Breeze states that the Proposed Transaction does not involve a franchised public utility with captive customers and will not result in, at the time of the Proposed 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 service agreements subject to review under sections 205 and 206 of the FPA.

The filing was noticed on November 18, 2013, with comments, protests, or interventions due on or before December 9, 2013. None were received.

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) (2013). Any opposed or untimely filed motion to intervene is governed by the provisions of Rule 214.

Information and/or systems connected to the bulk 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 database, 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, North America Electric Reliability Corporation 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, Prairie Breeze is advised that it must comply with the requirements of Order No. 652. In addition, Prairie Breeze shall make any necessary filings under section 205 of the FPA to implement the Proposed Transaction.

After consideration, it is concluded that the Proposed Transaction is consistent with the public interest and is authorized, subject to the following conditions:

(1) The Proposed 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 determinations of costs, 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 Proposed Transaction results in changes in the status or upstream ownership of Prairie Breeze's affiliated qualifying facilities, if any, an appropriate filing for recertification pursuant to 18 C.F.R. section 292.207 (2012) shall be made;

(6) Prairie Breeze shall make appropriate filings under section 205 of the FPA, as necessary, to implement the Proposed Transaction; and

(7)Prairie Breeze 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 (2012). 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 (2013).

Steve P. Rodgers

Director

Division of Electric Power Regulation - West

TNS 30TacordaCheng-131219-4583382 30TacordaCheng