Relevant Documents:Calpine MotionConsolidated Edison Development Motion /
DeclarationMojave Solar Motion /
DeclarationFTP Power Motion /
DeclarationScheduling Stipulation
Various power purchase agreement, or PPA, contract counterparties of PG&E Corp. have followed
NextEra Energy in filing motions to intervene in the PG&E debtors’
adversary proceeding filed against the Federal Energy Regulatory Commission, or FERC. Among the PPA contract parties seeking to intervene are Calpine Corp, “California state’s single largest provider of electricity from natural gas and geothermal resources,” and Consolidated Edison Development, which says in its motion that it has approximately 665 MW of renewable energy projects that are the subject of wholesale PPAs with PG&E. Mojave Solar LLC, Vantage Wind Energy LLC and KES Kingsburg LP, Enel Green Power North America, and Capital Dynamics also submitted intervention requests.
Like NextEra, the movants argue that the potential rejection of their PPAs in the chapter 11 cases provide them with a basis to intervene in the adversary proceeding. In the alternative, the court should authorize the movants’ permissive intervention in the lawsuit, assert the motions.
The debtors’ adversary proceeding seeks a declaratory judgment confirming that the bankruptcy court has exclusive jurisdiction over the debtors’ rights to reject certain executory PPAs or other FERC-regulated agreements under section 365 of the Bankruptcy Code. The debtors have also asked for injunctive relief to prevent enforcement of a
Jan. 25 FERC ruling stating that the “Commission and the bankruptcy courts have concurrent jurisdiction to review and address the disposition of wholesale power contracts sought to be rejected through bankruptcy.”
In its motion to intervene, NextEra argued that the litigation commenced by the debtors is “an attempt to bypass the exclusive appellate review process set forth in the Federal Power Act ... and obtain an order from this Court effectively overruling the FERC Order - an order entered in a proceeding initiated by NextEra and to which NextEra was a party.” Several of the movants in the subsequent intervention requests reference NextEra’s arguments and say that their arguments for intervention are made on similar grounds. The movants also argue that the debtors’ adversary proceeding amounts to a collateral attack on the FERC orders and seeks to give the debtors the ability to potentially reject their wholesale PPAs without the protections of the Federal Power Act and FERC review.
The court has scheduled a hearing on the intervention motions on Feb. 13 at 4:30 p.m. ET. Objections to the motions are due on Feb. 11 at 7 p.m. ET and replies are due on Feb. 12.
Calpine Motion
Calpine Corp. and the other movants - Clearway Energy Inc. and Clearway Energy Group LLC; Crockett Cogeneration; Diablo Winds LLC; EDF Renewables Inc.; Exelon Corp. and AV Solar Ranch 1 LLC; Marubeni Corp.; Middle River Power and MRP San Joaquin Energy LLC; NRG Energy Inc.; Southern Power Co.; Topaz Solar Farms LLC and TerraForm Power Inc. - note that they are parties (or owners of parties) to wholesale PPAs with PG&E Corp. and Pacific Gas and Electric Co. that are subject to FERC jurisdiction.
Calpine Corp. notes that it owns, leases, and operates natural gas-fired and renewable geothermal power plants in the United States and Canada with an aggregate generating capacity of approximately 27,000 MW. Calpine states that it is California state’s single largest provider of electricity from natural gas and geothermal resources with generation capacity of nearly 5,500 MW, representing up to 10% of the California Independent System Operator’s peak power demand. Calpine operates 13 power plants, which generate 725 MW of renewable geothermal power, or approximately 10% of California’s renewable energy in all of 2016, the filing says. With respect to its relationship to PG&E, Calpine supplies PG&E with 250 MW of renewable energy and capacity and more than 1,200 MW from various natural gas-fired facilities, through multiple power purchase agreements.
According to Calpine, “the distinct regulatory and reliability issues implicated by Calpine’s renewable and natural gas power generation operations, and its many-decades-long commercial relationship with PG&E, make Calpine uniquely interested in enforcing the FERC order and ensuring the rates, terms, and other conditions set forth in its PPAs are set and enforced by the requisite authorities in accordance with the FPA.” Its substantial and long-term investment in the State of California also make Calpine especially interested in a successful restructuring of the debtors in these cases, says the motion.
The filing maintains that through the adversary proceeding, “the Debtors seek to end-run well-established Supreme Court authority holding that FERC has exclusive jurisdiction to decide whether modification or abrogation of such PPAs complies with the [FPA] ... and to evade the exclusive appellate review process applicable to orders entered by FERC set forth in the FPA.”
Consolidated Edison Development Motion
Consolidated Edison Development Inc., or ConEd, says in its intervention motion that it has approximately 665 MW of renewable energy projects in California, Nevada and Arizona that are the subject of wholesale PPAs with PG&E. Specifically, the company has 15 solar projects in Arizona, California and Nevada totaling 563 MW and one wind project in California totaling 102 MW, according to the filing. Under the terms of each ConEd wholesale contract with PG&E, the motion says, a ConEd subsidiary “owns and operates a generating facility and sells the energy and certain attributes (including, without limitation, ‘green attributes’ such as Renewable Energy Certificates) generated thereby to PG&E to enable PG&E to, among other things, meet its resource adequacy and renewable energy requirements prescribed by the California Public Utilities Commission.”
Continuing, the motion argues that under the legal standard for intervention in Rule 24(a)(2), ConEd only needs to show that representation of its interests in the lawsuit by the existing parties “may be inadequate,” a condition satisfied here because the debtors’ interests are “directly opposed” to ConEd’s. Moreover, FERC, as a government regulatory agency, has “no pecuniary interest in PG&E's continued performance of the Wholesale Contracts.” ConEd also notes that the debtors have not sought rehearing or appellate review of the FERC order in the circuit courts in accordance with the FPA, which grants federal circuit courts of appeal exclusive jurisdiction to “affirm, modify, or set aside” FERC orders.
In addition, ConEd filed a
joinder to NextEra’s motion to withdraw the reference from the bankruptcy court, asking for the adversary proceeding to be litigated in the district court in the first instance.
FTP Power Motion / Declaration
FTP Power, also known as sPower, also seeks to intervene in the adversary proceeding. sPower is the largest private owner of operating solar assets in the United States, owning and operating solar and wind assets greater than 1.4 GW and has a development pipeline of more than 10 GW, says the filing. According to the motion, sPower, through its subsidiaries, is party to six PPAs with PG&E between 2012 to 2015.
Mojave Solar Motion / Declaration
Mojave Solar, an indirect subsidiary of Atlantica Yield plc, says the entirety of its net electric capacity is contractually committed to Pacific Gas and Electric Co. pursuant to a long-term power purchase agreement. According to the declaration of Emiliano Garcia, Mojave Solar LLC president, the project has a capacity of 250 MW on a net basis and 280 MW on a gross basis. Mojave says its PPA is among those that the debtors may be considering for rejection, referencing the debtors’
declaration in support of the injunction motion. Mojave says its PPA gives it a “significant protectable interest” in the subject matter of the adversary proceeding.
Vantage/KES Kingsburg Motion
Vantage Wind Energy LLC and KES Kingsburg LP’s intervention motion notes that they were previously permitted to intervene in the proceeding that resulted in the FERC order. The filing says that KES Kingsburg owns and operates a 36.2 MW natural gas-fired generating facility in Kingsburg, California and sells the entire output of its facility to PG&E pursuant to a long-term PPA. Vantage Wind Energy LLC owns and operates a 90 MW wind farm in Kittitas County, Washington constructed on the basis of a long-term PPA with Pacific Gas and Electric Co.
First Solar Motion / Declaration
First Solar Inc., and its indirect subsidiary, Willow Springs Solar 3 LLC, also seek to intervene in the adversary proceeding. Willow Springs Solar 3 has a contracted electric capacity of approximately 75 MW. The entirety of the WS3 project’s net electric capacity is contractually committed to PG&E under a long-term PPA, says the motion.
Enel Green Power Motion / Declaration
Enel Green Power North America’s motion to intervene notes that the company’s subsidiaries have entered into three capacity storage agreements, or CSAs, with PG&E, dated November 2017 with terms ranging from 10 to 20 years. The filing notes that each CSA encompasses two phases: (i) the development of an energy storage facility and (ii) providing resource adequacy to PG&E from each facility to enable PG&E to meet its resource adequacy and renewable energy requirements prescribed by the CPUC. In addition, Enel subsidiaries are party to two PPAs with PG&E, dated Feb. 27, 2017 and Mar. 22, 2015, respectively, says the motion.
Capital Dynamics Motion
Capital Dynamics, or CapDyn, a Delaware corporation that manages private equity funds that develop, own and operate through wholly-owned or partially-owned subsidiaries, renewable electric generation facilities throughout the US, also filed an intervention motion. Each of the CapDyn parties owns a solar power generation facility and is party to a long term wholesale PPA with the CapDyn PPAs, notes the motion.