ORDER NUMBER
G-230-19
IN THE MATTER OF
the Utilities Commission Act, RSBC 1996, Chapter 473
and
Heartland Generation Ltd. and Energy Capital Partners III, LLC
Application for an Exemption from Part 3 of the Utilities Commission Act
BEFORE:
W. M. Everett, QC, Commissioner
on September 24, 2019
ORDER
WHEREAS:
A. On June 28, 2019, Energy Capital Partners III, LLC and Heartland Generation Ltd. (Heartland) filed an application with the British Columbia Utilities Commission (BCUC) for continued exemption from Part 3 of the Utilities Commission Act (UCA), pursuant to section 88(3) of the UCA (Application);
B. Heartland, an entity indirectly owned by Energy Capital Partners III, LLC, intends to purchase from ATCO Power Ltd. 2010 (AP2010) its indirect interest in ATCO Power Canada Ltd. (APCAN), formerly named CU Power Canada Limited (CU Power);
C. AP2010, through APCAN, currently holds a 50 percent interest in the McMahon Cogeneration Plant (the Project) located in Taylor, British Columbia;
D. The remaining 50 percent interest in the Project is held by McMahon Power Holding Limited Partnership (MPHLP) with nearly all its limited partnership units currently being held by NorthRiver Midstream Ltd. (NRMI);
E. Heartland, AP2010 and APCAN entered into a Share Purchase Agreement (SPA), effective May 25, 2019, whereby Heartland agreed to acquire 100 percent of AP2010’s interest in APCAN and thereby APCAN’s 50 percent ownership interest in the Project;
F. Immediately following the closing of the SPA, APCAN would become a wholly-owned subsidiary of Heartland;
G. Heartland is a corporation registered in British Columbia that, immediately prior to, and following the closing of the SPA will be indirectly controlled by Energy Capital Partners III, LLC;
H. MPHLP and APCAN are presently exempt from Part 3 of the UCA to the extent that those provisions would apply by reason of each party’s ownership and operation of the Project;
I. On July 10, 1991, the BCUC issued Order G-58-91 pursuant to Order in Council 975, 1991, exempting Westcoast Energy Inc. (Westcoast), the previous indirect owner of MPHLP’s share in the Project, and CU Power from the application of provisions of Part 3 of the UCA to the extent those provisions would apply by reason of their direct or indirect ownership and operation of the Project;
J. On September 26, 2002, the BCUC issued Order G-68-02, which specified that the exemption applies only to the entity whose ownership interests in the Project, at all times, are held directly or indirectly by Westcoast or APCAN (formerly CU Power) respectively;
K. By Order G-135-19 dated June 19, 2019, the BCUC rescinded and replaced Order G-68-02 to replace the operative clause on page 2 of Order G-58-91 to reflect NRMI’s acquisition of Westcoast’s ownership interests of MPHLP;
L. Following Heartland’s acquisition of AP2010’s ownership interests in APCAN, an order is required in accordance with Order G-68-02 to continue to exempt the Project from the application of Part 3 of the UCA as the transaction will ultimately transfer ownership of the Project from the current owners of APCAN to Heartland, an entity indirectly owned by Energy Capital Partners III, LLC, and the Project may be the subject of future restructuring while remaining under the indirect control of Energy Capital Partners III, LLC;
M. Section 99 of the UCA provides that the BCUC may reconsider, vary or rescind an order made by it; and
N. The BCUC has reviewed the Application and considers approval to be warranted.
NOW THEREFORE pursuant to section 99 of the UCA, the BCUC orders as follows:
1. The operative clause on page 2 of Order G-58-91 is varied and replaced as follows:
• MPHLP, APCAN and each of their respective successors in interest to the Project (provided that at all times the ownership interests of such successors in interest are held directly or indirectly by NRMI or Energy Capital Partners III, LLC) are exempt from the application of the provisions of Part 3 of the UCA to the extent that those provisions would apply by reason of their ownership and operation of the Project.
2. This order will become effective on the closing date of the SPA in which Heartland, an entity indirectly owned by Energy Capital Partners III, LLC will acquire 100 percent of AP2010’s shares in APCAN.
3. The applicants (Heartland and Energy Capital Partners III, LLC) are directed to provide:
• Notice in writing to the BCUC that the SPA has closed, no later than five (5) business days after the closing occurs.
4. Energy Capital Partners III, LLC, Heartland, APCAN, their successors and assigns must notify the BCUC in writing within 90 days of any subsequent changes to their direct and or indirect interest in the Project to which the exemption under this order applies.
DATED at the City of Vancouver, in the Province of British Columbia, this 24th day of September 2019.
BY ORDER
Original signed by:
W. M. Everett, QC
Commissioner