FERC Issues Order Authorizing Acquisition of Jurisdictional Facilities re SunEdison LLC et al Under EC14-90

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WASHINGTON, June 26 -- The U.S. Department of Energy's Federal Energy Regulatory Commission issued the text of the following delegated order: SunEdison LLC AES U.S. Solar, LLC Docket No. EC14-90-000 ORDER AUTHORIZING ACQUISITION OF JURISDICTIONAL FACILITIES (Issued June 26, 2014) On May 23, 2014, as amended on June 14, 2014, SunEdison LLC (SunEdison) and AES U.S. Solar, LLC (AES U.S. Solar) (collectively, Applicants) filed an application (Application) pursuant to section 203(a)(1) of the Federal Power Act (FPA) requesting Commission authorization for the disposition of jurisdictional facilities by which SunEdison will acquire the 50 percent of issued and outstanding interests in Silver Ridge Power LLC (Silver Ridge) currently held by AES U.S. Solar. As a result, indirectly, SunEdison will also acquire AES U.S. Solar's 50 percent interest in Imperial Valley Solar 1, LLC (Imperial Valley) and AES U.S. Solar's 10 percent interest in CSolar IV West, LLC (CSolar West) (together, the Transaction). Following consummation of the Transaction and conforming to the authorization in Docket No. EC14-74-000, SunEdison's interest in CSolar West will be approximately 20 percent, consistent with its 50 percent interest in Silver Ridge. Applicants state that the jurisdictional facilities consist of Imperial Valley's and CSolar West's market-based rate schedules and power purchase agreements. SunEdison, a Delaware limited liability company, is a developer of solar energy projects. SunEdison is owned by SunEdison, Inc., which is a developer, manufacturer, and seller of photovoltaic energy solutions and silicon wafers to the semiconductor industry. SunEdison owns or operates under sale-leaseback arrangements, approximately 355 megawatts (MW) of solar generating capacity in the United States, and all of SunEdison's solar projects have committed their entire output to third-parties under long-term power purchase agreements. According to the Application, approximately 156 MW of SunEdison's solar generating capacity is located in the footprint of the California Independent System Operator Corporation (CAISO). AES U.S. Solar, a Delaware limited liability company, is a wholly owned subsidiary of the AES Corporation (AES). AES U.S. Solar owns 50 percent of Silver Ridge, a Delaware limited liability company, and Riverstone Holdings, LLC (Riverstone) owns the other 50 percent. Silver Ridge was established in 2008 to develop, own, and operate large solar power plants. Silver Ridge owns a 100 percent interest in Imperial Valley. Imperial Valley is an EWG with market-based rate authority that owns and operates an approximately 200 MW solar power generating facility located in the CAISO footprint. AES is an energy company that indirectly owns approximately 6,000 MW of merchant generating capacity throughout the United States, and owns approximately 7,000 MW of regulated generation through its indirect ownership of The Dayton Power and Light Company and Indianapolis Power & Light Company, both traditional vertically-integrated utilities. Applicants state that Silver Ridge owns an interest in the CSolar West solar project with market-based rate authority, located in the CAISO market, with an approximately 150 MW generation capacity that is scheduled to go into service in the first quarter of 2015. In Docket No. EC14-74-000, a request was filed to increase Silver Ridge's ownership interests in CSolar West. Applicants add that, consistent with the authorization granted in Docket No. EC14-74-000, Silver Ridge anticipates increasing its equity interest in CSolar West to approximately 40 percent. Under the Transaction, SunEdison will acquire, directly or through a subsidiary, 50 percent of the issued and outstanding limited liability company interests in Silver Ridge currently held by AES U.S. Solar and AES U.S. Solar's 50 percent interest in Imperial Valley and its 20 percent interest in CSolar West. Applicants state that following the Transaction, Silver Ridge, Imperial Valley and Silver Ridge's interest in CSolar West will be jointly owned by SunEdison and Riverstone. Applicants state that the Transaction is consistent with the public interest and will not have an adverse impact on competition, rates or regulation, nor will it result in any cross-subsidization or the pledge or encumbrance of utility assets to any associated company. With respect to horizontal market power, Applicants state that SunEdison owns or operates approximately 355 MW of solar generating capacity in the United States, all of which is committed to third parties under long-term contracts. Of this, approximately 156 MW is located in the balancing authority area of CAISO. Silver Ridge, through its interest in Imperial Valley, owns and operates approximately 200MW in CAISO. According to Applicants, although SunEdison and Silver Ridge own capacity in the CAISO market, the extent of the generation overlap in the same geographic market is a de minimis share of the 78,133 MW of installed capacity in CAISO. (Additionally, Applicants state that much of the combining entities - Sun Edison and Silver Ridge, generating capacity in the CAISO footprint is fully committed to unaffiliated third parties under long-term power purchase agreements. Thus, according to Applicants, the Transaction will not raise any horizontal market power concerns and a competitive analysis screen is not required. With respect to vertical market power concerns, Applicants represent that none of them or their affiliates own or control any transmission facilities used to provide service to third parties or inputs to electricity production in any relevant market that would allow them to erect barriers to entry to new generation in such markets. Additionally, Applicants state that they or their affiliates do not have any natural gas storage capacity or provide any storage service or inputs to electricity products in the CAISO market. Thus, according to Applicants, the Transaction will not raise any vertical market power concerns and a competitive analysis is not required. With regard to the effect on rates, Applicants state that following the consummation of the Transaction, Applicants will continue to make wholesale power sales of electric energy, capacity, and ancillary services at market-based rates pursuant to tariffs on file with the Commission. In addition, none of Applicants, nor any of their affiliates, provide unbundled transmission service. Thus, according to Applicants, the Transaction will have no adverse effect on wholesale ratepayers or transmission customers. With regard to regulation, Applicants state that the Transaction will not diminish the regulatory authority of the Commission, or any state commission, create a regulatory gap, or shift regulatory authority between the Commission and any state commission. Thus, according to Applicants, the Transaction will not impair the effectiveness of federal or state regulation. Applicants state that Transaction will not result in, at the time of the Transaction or in the future, cross-subsidization of a non-utility associate company or pledge of encumbrance of utility assets for the benefit of an associate company. Applicants add that the Transaction qualifies for the safe harbor for transactions that do not involve a franchised public utility with captive customers. In addition, Applicants represent that, based on facts and circumstances known to Applicants or that are reasonably foreseeable, the Transaction will not result in, at the time of the Transaction or in the future: (1) any transfers of facilities between a traditional 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 issuances of securities by a traditional 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 pledges or encumbrances of assets of a traditional 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 contracts between a non-utility associate company and a traditional 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 May 27, 2014 and again on June 11, 2014, with comments, protests or interventions due on or before June 13, 2014 and June 19, 2014 respectively. None was 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 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 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 the 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 they 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 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 Applicants' affiliated Qualifying Facilities, if any, an appropriate filing for recertification pursuant to 18 C.F.R. section 292.207 (2013) shall be made; (6) Applicants shall make appropriate filings under section 205 of the FPA, as necessary, to implement the Transaction; (7) Applicants must inform the Commission of any change in circumstances that would reflect a departure from the facts the Commission relied upon in authorizing the Transaction; and (8) Applicants shall notify the Commission within 10 days of the date that the Transaction 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 (2013). 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 18EstebanLiz-140628-30FurigayJane-4782448 30FurigayJane

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