FERC Issues Order Authorizing Disposition of Jurisdictional Facilities re Catalina Solar Lessee, LLC Under EC14-99

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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: Catalina Solar Lessee, LLC Docket No. EC14-99-000 ORDER AUTHORIZING DISPOSITION OF JURISDICTIONAL FACILITIES (Issued June 26, 2014) On June 3, 2014, Catalina Solar Lessee, LLC (Catalina Solar Lessee or Applicant) 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, 730 CatSolar, LLC (730 CatSolar) will acquire from EDF Renewable Asset Holdings, Inc. (EDF RAH) a 50 percent ownership interest in Catalina Solar Lessee (Proposed Transaction). The affected jurisdictional facilities are a market-based rate tariff, a power purchase agreement, and associated books, records, and accounts. Catalina Solar Lessee, authorized to sell power at market-based rates, operates a 100 megawatt (MW) photovoltaic solar generating facility (Facility) located in Kern County, California and within the balancing authority area (BAA) of the California Independent System Operator Corporation (CAISO). Thus, according to Catalina Solar Lessee, the relevant market for the Facility is the CAISO BAA. Output from the Facility is committed under a long-term power purchase agreement. Catalina Solar Lessee is a direct wholly-owned subsidiary of EDF RAH, which, in turn, is an indirect wholly-owned subsidiary of corporate parent Electricite de France, S.A. (EDF S.A.). Within the CAISO BAA, EDF S.A. indirectly owns or controls approximately 840 MW of generating capacity, a 460 kilovolt (kV) generation-tie line, and an entity that owns and operates a 46-mile, 230 kV transmission line. 730 CatSolar is an entity owned by Teachers Insurance and Annuity Association of America (TIAA), a legal reserve life insurance company that invests in the energy sector. Within the CAISO BAA, TIAA owns an indirect, approximately 49 percent ownership interest in Otay Landfill Gas LLC, owner of qualifying facilities (QFs) located in southern California with a combined capacity of 7.5 MW. The Proposed Transaction involves an agreement between EDF-RAH and 730 CatSolar. According to Catalina Solar Lessee, EDF-RAH will contribute 100 percent of the membership interests in Catalina Solar Lessee to a newly created holding company. 730 CatSolar will then purchase 50 percent of the membership interests in the newly created holding company. Thus, 730 CatSolar will acquire 50 percent of the ownership interests in Catalina Solar Lessee. Catalina Solar Lessee states that the Proposed Transaction is consistent with the public interest and will not have an adverse effect on competition, rates, or regulation. With respect to horizontal market power, Catalina Solar Lessee states that the Proposed Transaction raises no concerns. Catalina Solar Lessee states that the combined generating capacity of TIAA's QFs totaling 7.5 MW and the existing 100 MW Facility represents a de minimus amount compared to the total installed capacity in the CAISO market. With regard to vertical market power, Catalina Solar Lessee states that there are no concerns because TIAA does not own or control any transmission facility or relevant inputs to electric power production. With regard to rates, Catalina Solar Lessee states that the Proposed Transaction will not have an adverse effect. Catalina Solar Lessee states that it will continue to sell power from the Facility at market-based rates and that TIAA does not own any transmission facility. With regard to regulation, Catalina Solar Lessee states that the Proposed Transaction will not have an adverse effect because it will not deprive the Commission or any other federal or state agency of jurisdiction as before. Catalina Solar Lessee 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, Catalina Solar Lessee states that the Proposed Transaction does not involve a franchised public utility with captive customers and will not result in: (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 June 4, 2014, with comments, protests, or interventions due on or before June 24, 2014. 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, Catalina Solar Lessee is advised that it must comply with the requirements of Order No. 652. In addition, Catalina Solar Lessee 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 Catalina Solar Lessee's qualifying facilities, an appropriate filing for recertification pursuant to 18 C.F.R. section 292.207 (2013) shall be made; (6) Catalina Solar Lessee must inform the Commission, within 10 business days of the change, of any change in circumstances that would reflect a departure from the facts the Commission relied upon in authorizing the Proposed Transaction; (7) Catalina Solar Lessee shall make appropriate filings under section 205 of the FPA, as necessary, to implement the Proposed Transaction; and (8)Catalina Solar Lessee 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 (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-4782479 30FurigayJane

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