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Acquisitions
3 Months Ended
Mar. 31, 2015
Business Combinations [Abstract]  
ACQUISITIONS
ACQUISITIONS
During 2015, Southern Power Company acquired or contracted to acquire the following projects in accordance with its overall growth strategy.
Decatur County Solar Projects
On February 19, 2015, Southern Power Company acquired all of the outstanding membership interests of Decatur Parkway Solar Project, LLC and Decatur County Solar Project, LLC from TradeWind Energy, Inc. as part of Southern Power's plans to build two solar photovoltaic facilities: the Decatur Parkway Solar Project and the Decatur County Solar Project. These two projects, approximately 80 MWs and 19 MWs, respectively, will be constructed on separate sites in Decatur County, Georgia. Construction of the Decatur Parkway Solar Project commenced in February 2015, while construction of the Decatur County Solar Project is expected to commence in June 2015. Both projects are expected to begin commercial operation in late 2015, and the entire output of each project is contracted to Georgia Power. The Decatur Parkway Solar Project is contracted under a 25-year PPA and the Decatur County Solar Project is contracted under a separate 20-year PPA. Construction costs incurred through March 31, 2015 were $32 million.
The total estimated cost of the facilities is expected to be between $200 million and $220 million, which includes the acquisition price for all of the outstanding membership interests of Decatur Parkway Solar Project, LLC and Decatur County Solar Project, LLC from TradeWind Energy, Inc. The ultimate outcome of these matters cannot be determined at this time.
Kay County Wind Facility
On February 24, 2015, Southern Power Company, through its wholly-owned subsidiary Southern Renewable Energy, Inc., entered into a purchase agreement with Kay Wind Holdings, LLC, a wholly-owned subsidiary of Apex Clean Energy Holdings, LLC, the developer of the project, to acquire all of the outstanding membership interests of Kay Wind, LLC (Kay Wind). Kay Wind is constructing and owns an approximately 299-MW wind facility in Kay County, Oklahoma. The wind facility is expected to begin commercial operation in late 2015, and the entire output of the facility is contracted under separate 20-year PPAs with Westar Energy, Inc. and Grand River Dam Authority.
In March 2015, Kay Wind obtained the necessary financing for the construction of the facility, and Southern Power Company's acquisition is expected to close in the fourth quarter 2015. The purchase price is expected to be approximately $492 million, with potential purchase price adjustments based on performance testing, and is included in Southern Power's capital program estimates for 2015. The completion of the acquisition is subject to Kay Wind achieving certain construction and project milestones, and various other customary conditions to closing. The ultimate outcome of this matter cannot be determined at this time.
Butler Solar Project
On March 12, 2015, Southern Power Company entered into a purchase agreement with CERSM, LLC and Community Energy, Inc. to acquire all of the outstanding membership interests of Butler Solar LLC as part of Southern Power's plans to build an approximately 100-MW solar photovoltaic facility in Taylor County, Georgia. Construction of the project is expected to commence in July 2015, with commercial operation expected to begin in December 2016. The entire output of the project is contracted to Georgia Power under a 30-year PPA.
Southern Power Company's acquisition of Butler Solar LLC is expected to close later in May 2015 and the total estimated cost of the facility is expected to be between $220 million and $230 million, which includes the acquisition price for all of the outstanding membership interests of Butler Solar LLC from CERSM, LLC and Community Energy, Inc. The completion of the acquisition is subject to customary conditions to closing. The ultimate outcome of this matter cannot be determined at this time.
Subsequent Events
Lost Hills-Blackwell Solar Facilities
On April 15, 2015, Southern Power Company, through its subsidiary Southern Renewable Partnerships, LLC (SRP), acquired 100% of the class A membership interests of Lost Hills Blackwell Holdings, LLC (Lost Hills Blackwell) from a wholly-owned subsidiary of First Solar, Inc. (First Solar), the developer of the project, for approximately $74 million. Concurrently, a wholly-owned subsidiary of First Solar acquired 100% of the class B membership interests of Lost Hills Blackwell for approximately $34 million. SRP and the class B member are entitled to 51% and 49%, respectively, of all cash distributions from Lost Hills Blackwell. In addition, Southern Power Company is entitled to substantially all of the federal tax benefits with respect to the transaction. Lost Hills Blackwell constructed and owns the approximately 20-MW Lost Hills and the approximately 12-MW Blackwell solar facilities in Kern County, California. These solar facilities began commercial operation on April 17, 2015, and their entire output is contracted under PPAs, initially to the City of Roseville and then to Pacific Gas and Electric Company, that together extend approximately 29 years.
Pawpaw Solar Project
On April 22, 2015, Southern Power Company entered into a purchase agreement with Longview Solar, LLC to acquire all of the outstanding membership interests of LS – Pawpaw, LLC as part of Southern Power Company's plans to build an approximately 30-MW solar photovoltaic facility in Taylor County, Georgia. Construction of the project is expected to commence in June 2015, with commercial operation expected to begin in December 2015. The entire output of the project is contracted to Georgia Power under a 30-year PPA.
Southern Power Company's acquisition of LS – Pawpaw, LLC is expected to close later in May 2015 and the total estimated cost of the facility is expected to be between $65 million and $75 million, which includes the acquisition price for all of the outstanding membership interests of LS – Pawpaw, LLC from Longview Solar, LLC. The completion of the acquisition is subject to customary conditions to closing. The ultimate outcome of this matter cannot be determined at this time.
North Star Solar Facility
On April 30, 2015, Southern Power Company, through its subsidiary SRP, acquired 100% of the class A membership interests of NS Solar Holdings, LLC (North Star) from a wholly-owned subsidiary of First Solar, the developer of the project, for approximately $208 million. Concurrently, a wholly-owned subsidiary of First Solar acquired 100% of the class B membership interests of North Star for approximately $99 million. SRP and the class B member are entitled to 51% and 49%, respectively, of all cash distributions from North Star. In addition, Southern Power Company is entitled to substantially all of the federal tax benefits with respect to the transaction. North Star is constructing and owns the approximately 60-MW North Star solar facility in Fresno County, California, which is expected to begin commercial operation in June 2015. The entire output of the project is contracted under a 20-year PPA with Pacific Gas and Electric Company. The ultimate outcome of this matter cannot be determined at this time.