Business, North America, Regulation and Policy

FERC okays sale of 221 MW of Alcoa hydro assets in North Carolina to I Squared

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The Federal Energy Regulatory Commission on Sept. 30 approved a July application from Alcoa Power Generating Inc. (the seller), plus Cube Yadkin Generation LLC and Cube Yadkin Transmission LLC (the buyers), related to the sale of Alcoa hydro assets in North Carolina.

The approval covers: the sale and transfer by Alcoa Power of 100% of its ownership interests in the Yadkin Hydroelectric Project and related jurisdictional assets (Yadkin Project) to Genco; and the sale and transfer by Alcoa Power of 100% of its ownership interests in certain transmission facilities and related jurisdictional assets to Transco.

Alcoa Power is a wholly owned subsidiary of Alcoa Inc. Alcoa Power owns and operates limited generation and limited and discrete transmission facilities in various locations throughout the United States.

In 1999, Alcoa Inc.’s separate power supply subsidiaries were reorganized to create a single jurisdictional entity, Alcoa Power, with transmission and generation facilities in five business divisions in separate locations. The Yadkin Division owns and operates the Yadkin Project. The Yadkin Project consists of four hydroelectric stations with a total capacity of approximately 221 MW, located near Badin, North Carolina. The Yadkin Division is its own balancing authority area (BAA), which is interconnected with the Duke Energy Carolinas LLC (Duke Carolinas) and Duke Energy Progress – East (Duke East) BAAs.

Genco was formed for the purpose of acquiring and owning the Yadkin Project. Genco will sell all of the output from the Yadkin Project at wholesale pursuant to its market-based rate authorization. Transco was formed for the purpose of acquiring and owning the Yadkin Transmission Facilities.

These buyers are wholly-owned, direct subsidiaries of Cube Hydro Carolinas LLC, which in turn is a wholly-owned, direct subsidiary of Helix Partners LLC. Helix HoldCo LLC directly owns 98.5% of the membership interests in Helix Partners. Helix HoldCo is directly owned by ISQ Hydro Aggregator LLC (62.5%) and ISQ Helix Aggregator LLC (28.1%). Both ISQ Hydro Aggregator and ISQ Helix Aggregator are indirectly controlled by I Squared Capital, a private equity investment manager.