M&A: NextEra Energy Resources and Blackstone to co-own hybrid renewables portfolio
Affiliates of NextEra Energy Resources and subsidiaries of Blackstone are requesting regulatory approval from the Federal Energy Regulatory Commission (FERC) under section 203 for a sale and purchase transaction of a holding company called Nitro Renewables Holdings LLC, according to documentation filed at FERC.
Under the proposed transaction, dated July 8, the affiliates of Blackstone will directly acquire 100% of the Class B interests in Nitro Renewables Holdings, while the affiliates of NextEra Energy Resources will hold 100% of the Class A interests.
Nitro Renewables Holdings will own a portfolio of renewables assets with a combined power generation capacity of 870 MW, backed by long-term power purchase agreements (PPAs) with several offtakers.
According to the document, the respective membership interests to be held by Blackstone subsidiaries, namely BIP Naples PledgorCo VCOC LLC in BIP Naples and by BIP/BXCI Naples PledgorCo LLC in BX Naples, are passive interests that do not convey management or operational control and that convey only limited consent rights comparable to those held by passive tax equity investors in AES Creative.
Steptoe is serving as legal advisor to the seller, while Kirkland & Ellis is advising Blackstone, the filing stated.
The portfolio includes the following projects:
The Babbitt Ranch Energy Center with a 161 MW wind generating capacity in Coconino County, Arizona, within the Salt River Project (SRP) Agricultural Improvement and Power District. The Babbitt Ranch project is expected to commence operations in July. It will interconnect to the 500 kV Cedar Mountain – Moenkopi transmission line owned by Navajo Southern Transmission System, which is owned by parties to the Second Amended and Restated Navajo Co-Tenancy Agreement, including SRP. All of Babbitt Ranch Energy’s capacity is fully committed on a firm basis through a 30-year PPA with SRP.
The Bronco Plains Wind II is a 199 MW wind generating facility in Kit Carson County, Colorado, within the Public Service Company of Colorado (PSCo) balancing authority area. The Bronco Plains wind farm interconnects via an affiliated approximately 11-mile-long generation interconnection line to the Bronco Plains I substation and then the power is subsequently transmitted on a co-owned generation interconnection line to the Shortgrass switching station owned by PSCo. Bronco Plains II sells all the electric energy generated on a firm basis through a 20-year long-term PPA with Holy Cross Electric Association Inc., with an initial term ending December 2043.
The Clearwater Wind III is an approximately 100 MW wind generating project in Rosebud and Garfield Counties, Montana, within the Avista Corporation (AVA) BAA. Clearwater III expects to start generating test energy from the Clearwater III Facility in 3Q24. The Clearwater III project will connect to an associated interconnection transmission line owned by Clearwater Resources that interconnects with the Colstrip Transmission System, owned by NorthWestern Corporation d/b/a NorthWestern Energy (NorthWestern), Puget Sound Energy Inc. (PSE), Avista, Portland General Electric Company (PGE), and PacifiCorp. All the power produced by the Clearwater III farm, including the test energy, is fully committed on a firm basis through a PPA with a term of at least 30 years with Avista.
The Wadley Solar is a 260 MW solar project located in Jefferson County, Georgia, within the Southern Company Services (SOCO) BAA. The Wadley Solar project expects to produce test energy by 3Q24. The project is party to a generator interconnection agreement with SOCO, as agent for Alabama Power Company, Georgia Power Company, and Mississippi Power Company. All the power produced by the Wadley Solar project, including the test energy, is fully committed on a firm basis through a 30-year PPA with Georgia Power Co.
The 150 MW Washington County Solar project is in Washington County, Georgia, within the SOCO BAA. The Washington Solar project expects to produce test energy in 3Q24. It is party to a generator interconnection agreement with SOCO, as agent for Alabama Power Co., Georgia Power Co., and Mississippi Power Co. All the power produced by the project, including the test energy, is fully committed on a firm basis through a 30-year PPA with Georgia Power Co.
After the transaction, each of the project companies will become an indirect subsidiary of Nitro Holdings, a newly-formed holding company.
NextEra Resources is the competitive power subsidiary of NextEra Energy Inc. NextEra Resources’ subsidiaries own or operate merchant generating facilities in 38 states and Canada with a combined net generating capacity of approximately 32,900 MW, including interests in some facilities owned by NextEra Energy Partners LP (NEP).
*This story was originally published exclusively for NPM subscribers.
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