FERC Issues Order Authorizing Disposition of Jurisdictional Facilities re Buffalo Dunes Wind Project, LLC Under EC14-92

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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: Buffalo Dunes Wind Project, LLC Docket No. EC14-92-000 ORDER AUTHORIZING DISPOSITION OF JURISDICTIONAL FACILITIES (Issued June 26, 2014) On May 27, 2014, Buffalo Dunes Wind Project, LLC (Buffalo Dunes or Applicant) filed an application pursuant to section 203(a)(1) of the Federal Power Act (FPA) requesting Commission approval for a transaction in which EGPNA Development Holdings, LLC (EGPNA Development) will purchase 26 percent of the Class A Membership interests in Buffalo Dunes from EFS Buffalo Dunes, LLC (EFS Buffalo Dunes) (Proposed Transaction). Currently, EGPNA Development owns 49 percent of the Class A Membership Interests in Buffalo Dunes. Following the closing of the Proposed Transaction EGPNA Development will own 75 percent of the Class A Membership Interests in Buffalo Dunes. The jurisdictional facilities involved in the Proposed Transaction are Buffalo Dune's interconnection facilities, market-based rate tariff, and associated books and records. Applicant states that it owns a wind power project with a nameplate rating of 249.75 megawatts (MW) located in Grant, Finney and Haskell Counties, Kansas (the Buffalo Dunes Project). The Buffalo Dunes Project is located within the Southwestern Public Service Company (SPS) balancing authority area within the Southwest Power Pool, Inc. region. Buffalo Dunes' sole business is ownership and operation of the Buffalo Dunes Project. Buffalo Dunes has market-based rate authority and is also an exempt wholesale generator. Buffalo Dunes is committed to sell 202 MW of the Buffalo Dunes Project under a 20-year power purchase agreement with a non-affiliate, Alabama Power Company. Buffalo Dunes owns no transmission facilities other than limited interconnection facilities needed to connect the Buffalo Dunes Project with the transmission system. Currently, 49 percent of the Buffalo Dunes' Class A Membership Interests are owned by EGPNA Development, the managing member that has the right to control Buffalo Dunes on a day-to-day basis. EFS Buffalo Dunes owns 51 percent of Buffalo Dunes' Class A Membership Interests. Applicant states that EFS Buffalo Dunes is a passive investor in Buffalo Dunes. Applicant states that EGPNA Development is a wholly-owned subsidiary of Enel Green Power North America Development, LLC (Enel Development). Enel Development is a wholly-owned subsidiary of Enel Green Power International BV (Enel International BV). Enel International BV is a wholly-owned subsidiary of Enel Green Power S.p.A., an Italian joint-stock company, which in turn is a majority-owned subsidiary of Enel S.p.A., an Italian joint-stock company. Enel Green Power North America, Inc. (Enel NA), an affiliate of Enel Development, is designated as the Manager of EGPNA Development. Applicant states that Enel NA's principal business is owning, operating, and developing hydroelectric and renewable energy generation facilities throughout the United States and Canada. Applicant states that EFS Buffalo Dunes is a passive investor in Buffalo Dunes. EFS Buffalo Dunes is an indirect, wholly-owned subsidiary of General Electric Company (General Electric). Applicant states that General Electric, through its subsidiaries, is a passive owner of and an investor in a number of generating facilities in the United States. In the Proposed Transaction, EGPNA Development will exercise its option to purchase 26 percent of the Class A Membership Interests in Buffalo Dunes from EFS Buffalo Dunes. Following the Proposed Transaction, EGPNA Development will own 75 percent of the Class A Membership Interests in Buffalo Dunes, and EFS Buffalo Dunes will own 25 percent of the Class A Membership Interests in Buffalo Dunes. Applicant states that the Proposed Transaction is consistent with the public interest because it will have no adverse impact on competition, rates, or regulation and will not result in cross-subsidization or the pledge or encumbrance of utility assets for the benefit of an associate company. With respect to competition, Applicant represents that the Proposed Transaction involves EGPNA Development increasing its share of the Class A Membership Interests in Buffalo Dunes. Applicant states that EGPNA Development currently has the right to control Buffalo Dunes and its jurisdictional facilities on a day-to-day basis and will remain the Managing Member following the close of the Proposed Transaction. Applicant states that the Proposed Transaction will not result in a transfer of control. Therefore, according to the Applicant, the Proposed Transaction does not raise any horizontal market power concerns. Applicant states that the Proposed Transaction does not raise any vertical market power concerns, because neither Applicant nor its affiliates owns or controls transmission facilities in the same market as the Buffalo Dunes Project, except for the limited equipment necessary to connect individual generating facilities to the transmission grid. Accordingly, Applicant states that the Proposed Transaction does not raise any vertical market power concerns. Applicant states that the Proposed Transaction will have no adverse effect on rates because it will continue transacting according to its market-based rate authority, and the Proposed Transaction will not alter the terms of its power purchase agreement. Therefore, Applicant states that the Proposed Transaction will have no adverse effect on rates. Applicant states that the Proposed Transaction will have no adverse effect on state or federal regulation, because its status with the Commission will not change as a result of the Proposed Transaction. Applicant adds that the Proposed Transaction is not subject to regulation by any state entity. Therefore, Applicant states that the Proposed Transaction will not create a regulatory gap at the state or federal level and will have no adverse effect on regulation. Applicant 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 Proposed Transaction or in the future, cross-subsidization of a non-utility associate company or the pledge or encumbrance of utility assets of a traditional public utility associate company that has captive customers or that owns or provides transmission service over jurisdictional facilities for the benefit of an associate company, including: (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 contracts 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 May 28, 2014, with comments, protests or interventions due on or before June 17, 2014. None was 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 (2013)). Any opposed or untimely filed motion to intervene is governed by the provision of Rule 214. 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, the Applicant is advised that they must comply with the requirements of Order No. 652. In addition, the Applicant shall make appropriate filings under section 205 of the FPA, to implement the Proposed Transaction. 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. 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 Proposed Transaction is authorized upon the terms and conditions described in this Order 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 Proposed Transaction results in changes in the status or the upstream ownership of the Applicant's affiliated Qualifying Facilities, if any, an appropriate filing for recertification pursuant to 18 C.F.R. section 292.207 (2013) shall be made; (6) the Applicant shall make appropriate filings under section 205 of the FPA, as necessary, to implement the Proposed Transaction; (7) the Applicant must inform the Commission of any change in circumstances that would reflect a departure from the facts the Commission relied upon in authorizing the Proposed Transaction; and (8) the Applicant shall notify the Commission within 10 days of the date that the Proposed 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-4782454 30FurigayJane

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