On November 24, 2010, FERC issued an order granting Alta Wind Holdings, LLC’s (“Alta Wind”) petition for a declaratory order asking FERC to disclaim jurisdiction over certain investors in sale or leaseback transactions of wind projects.
Alta Wind is the parent company to several subsidiaries that are constructing four wind projects in Kern Country, California. The subsidiaries will also be leasing and operating the facilities, but the facilities will actually be owned by owner lessors or “statutory trusts” because the Alta Wind subsidiaries will eventually sell 100 percent of their interest to these owner lessors. Citibank, N.A. will hold the beneficial interests of the statutory trusts.
In applying a two-step analysis on whether a financial interest qualifies the owner lessors to be public utilities under federal law, FERC found Alta Wind investors to be passive and found they will not exercise control or decision-making over the facility. Also, Alta Wind investors will not be otherwise engaged in selling or producing power and the owner lessors will have a principal business activity other than that of a public utility. Accordingly, FERC found the Alta Wind investors will not be public utilities under section 201 of the Federal Power Act.