New York power plant project to enter construction in December

Cricket Valley Energy Center Rendering

Several parties now or prospectively involved in the 1,000 MW Cricket Valley Energy Center project applied at the New York State Public Service Commission for approval of ownership changes that will aid the financing of this $1.5 billion project.

The applicants were AP Cricket Valley Holdings II, MC CVEC Project Holdings I, Ullico Infrastructure Cricket Valley Holdco, Kiwoom SPV Development Bank of Japan Inc. SPV, SeAH Resources & Investment Resources & Investment, Cricket Valley Energy Holdings II, Cricket Valley Energy Center and Cricket Valley Energy Partners.

They said that AP Cricket Valley Holdings I, AP Cricket Valley Holdings II, and MC CVEC Project Holdings I are the current owners of Cricket Valley Energy Center, the developer of a proposed 1,000 MW, gas-fired facility in Dover, New York.

The petitioners requested a ruling declaring that the New York commission need not review under Public Service Law Section 70 the following transactions:

•A proposed transfer from MC CVEC Project Holdings I of 100 percent of its membership interests in CVEP to AP Cricket Valley Holdings II;

•AP Cricket Valley Holdings II's proposed sale of 2.5 percent to 5 percent of the issued and outstanding membership interests in CVEP to Ullico Infrastructure Cricket Valley Holdco;

•AP Cricket Valley Holdings II's proposed sale of 7.5 percent to 15 percent of the issued and outstanding membership interests in CVEP to Development Bank of Japan Inc. SPV;

•AP Cricket Valley Holdings II's proposed sale of 3 percent to 6 percent of the issued and outstanding membership interests in CVEP to Kiwoom SPV; and

•AP Cricket Valley Holdings II's proposed sale of 5 percent to 10 percent of the issued and outstanding membership interests in CVEP to SeAH Resources & Investment or an affiliate of SeAH Resources & Investment.

In the alternative, the petitioners request that the commission approve these transactions without modification or condition, pursuant to PSL Section 70 and any other statutory or regulatory provision deemed applicable. Petitioners also request that the commission declare that an intra-corporate restructuring, whereby Cricket Valley Energy Holdings II will be inserted between Cricket Valley Energy Holdings and CVEP, is not a jurisdictional transfer and no approval is required under PSL Section 70.

Finally, the petitioners also request a declaratory ruling that neither Ullico Infrastructure Cricket Valley Holdco nor Development Bank of Japan Inc. SPV will become an electric corporation under the PSL as a result of the consummation of these transactions because they will not be able to influence the operations of any electric plant in New York and, therefore, it would not be in the public interest to regulate Ullico Infrastructure Cricket Valley Holdco or Development Bank of Japan Inc. SPV as an electric corporation.

Said the Oct. 25 application: "The proposed transactions are in the public interest because they will provide needed equity for the development of CVEC’s proposed about 1,000 MW electric generating facility in New York. No competitive issues are raised by the proposed transactions.

"The petitioners have structured and are seeking commitments from equity sources and debt providers for a $1.5 billion financing of the facility. The petitioners anticipate a closing of the financing and commencement of construction of the facility and a 14.5-mile transmission line to interconnect the facility to the transmission system in December 2016. Financing commitments will expire if the financial closing is not achieved within limited time periods. Certain contract rights will terminate, permits will lapse, and construction costs will increase substantially if construction of the facility is not commenced within specified time frames, thereby jeopardizing the financing and development of the facility. Therefore, petitioners request expedited review of this petition and request commission action on the petition no later than the commission’s December 15, 2016 session."

The commission has granted CVEC a certificate of public convenience and necessity for the construction of a combined cycle, natural gas-powered about 1,000 MW facility on an inactive industrial site located in the town of Dover, Dutchess County, New York. CVEC is lightly regulated by the commission.

CVEC currently has three members: AP Cricket Valley Holdings I holds a 42.84 percent interest; AP Cricket Valley Holdings II holds a 41.78 percent interest; and MC CVEC Project Holdings I holds a 15.38 percent interest.

•AP Cricket Valley Holdings I is owned by J Cricket Holdings, part of a joint venture by Chubu Electric Power Co. Inc. and Tokyo Electric Power Co. Inc.

•MC CVEC Project Holdings I is indirectly owned by Marubeni Corp (Japan).

•AP Cricket Valley Holdings II is owned by AP Energy Holdings Inc., which is owned by APNA Holdings. APNA is owned by Advanced Power AG.

On the buy side of these dealings:

•Development Bank of Japan Inc. SPV is a to-be-formed special purpose entity that will be a unit of the Development Bank of Japan Inc.

•Kiwoom SPV is a to-be-formed special purpose entity that will be directly owned by an investment trust in Korea.

•SeAH Resources & Investment is based in South Korea and is engaged in investment and new business development.

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