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Acquisitions (Southern Power [Member])
12 Months Ended
Dec. 31, 2014
Southern Power [Member]
 
Business Acquisition [Line Items]  
ACQUISITIONS
ACQUISITIONS
2014
Adobe Solar, LLC
On April 17, 2014, the Company and TRE, through STR, a jointly-owned subsidiary owned 90% by the Company, acquired all of the outstanding membership interests of Adobe from Sun Edison, LLC, the original developer of the project. Adobe constructed and owns an approximately 20-MW solar generating facility in Kern County, California. The solar facility began commercial operation on May 21, 2014 and the entire output of the plant is contracted under a 20-year PPA with SCE. The acquisition was in accordance with the Company's overall growth strategy.
The Company's acquisition of Adobe included cash consideration of approximately $96.2 million, which included TRE's 10% equity contribution. The fair values of the assets, liabilities, and intangibles acquired were recorded as follows: $83.5 million to property, plant, and equipment, $14.5 million to prepayment related to transmission services, and $6.3 million to PPA intangible, resulting in a $5.2 million bargain purchase gain with a $2.9 million deferred tax liability. The bargain purchase gain is included in other income (expense), net in the Company's Statements of Income herein. Acquisition-related costs were expensed as incurred and were not material.
Macho Springs Solar, LLC
On May 22, 2014, the Company and TRE, through STR, acquired all of the outstanding membership interests of Macho Springs from First Solar Development, LLC, the original developer of the project. Macho Springs constructed and owns an approximately 50-MW solar photovoltaic facility in Luna County, New Mexico. The solar facility began commercial operation on May 23, 2014 and the entire output of the plant is contracted under a 20-year PPA with EPE. The acquisition was in accordance with the Company's overall growth strategy.
The Company's acquisition of Macho Springs included cash consideration of approximately $130.0 million, which included TRE's 10% equity contribution. The fair values of the assets acquired were recorded as follows: $128.0 million to property, plant, and equipment, $1.0 million to prepaid property taxes, and $1.0 million to prepayment related to transmission services. The acquisition did not include any contingent consideration. Acquisition-related costs were expensed as incurred and were not material.
SG2 Imperial Valley, LLC
On October 22, 2014, the Company, through its subsidiaries SRP and SG2 Holdings, acquired all of the outstanding membership interests of Imperial Valley from a wholly-owned subsidiary of First Solar, the developer of the project. Imperial Valley constructed and owns an approximately 150-MW solar photovoltaic facility in Southern California. The solar facility began commercial operation on November 26, 2014 and at that time a subsidiary of First Solar was admitted as a minority member of SG2 Holdings. The entire output of the plant is contracted under a 25-year PPA with San Diego Gas & Electric Company, a subsidiary of Sempra Energy (SDG&E). The acquisition was in accordance with the Company's overall growth strategy.
In connection with this acquisition, SG2 Holdings made an aggregate payment of approximately $127.9 million to a subsidiary of First Solar and became obligated to pay additional contingent consideration of approximately $599.3 million upon completion of the facility (representing the amount due to an affiliate of First Solar under the construction contract for Imperial Valley). When substantial completion was achieved on November 26, 2014, a subsidiary of First Solar was admitted as a minority member of SG2 Holdings. The members of SG2 Holdings made additional agreed upon capital contributions totaling $593.3 million to SG2 Holdings that were used to pay the contingent consideration due, leaving $6.0 million of contingent consideration payable upon final acceptance of the facility. As a result of these capital contributions, the aggregate purchase price payable by the Company for the acquisition of Imperial Valley was approximately $504.7 million in addition to the $222.5 million noncash contribution by the minority member. Following these capital contributions, the Company indirectly owns 100% of the class A membership interests of SG2 Holdings and is entitled to 51% of all cash distributions from SG2 Holdings, and First Solar indirectly owns 100% of the class B membership interests of SG2 Holdings and is entitled to 49% of all cash distributions from SG2 Holdings. In addition, the Company is entitled to substantially all of the federal tax benefits with respect to this transaction. As of December 31, 2014, the fair values of the assets acquired were recorded as follows: $707.5 million to property, plant, and equipment and $19.7 million to prepayment related to transmission services; however, the allocation of the purchase price to individual assets has not been finalized. Acquisition-related costs were expensed as incurred and were not material.
2013
Campo Verde Solar, LLC
In April 2013, the Company and TRE, through STR, acquired all of the outstanding membership interests of Campo Verde from First Solar, the developer of the project. Campo Verde constructed and owns an approximately 139-MW solar photovoltaic facility in Southern California. The solar facility began commercial operation in October 2013 and the entire output of the plant is contracted under a 20-year PPA with SDG&E. The asset acquisition was in accordance with the Company's overall growth strategy.
The Company's acquisition of Campo Verde included cash consideration of $136.6 million, which included TRE's 10% equity contribution. The fair value of the assets acquired was allocated entirely to property, plant, and equipment. The acquisition did not include any contingent consideration and due diligence costs were expensed as incurred and were not material. Under an engineering, procurement, and construction agreement, an additional $355.5 million was paid to a subsidiary of First Solar for construction of the solar facility.
Subsequent Events
Decatur County Solar Projects
On February 19, 2015, the 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 the Company's plans to build two solar photovoltaic facilities; the Decatur Parkway Solar Project and the Decatur County Solar Project. These two projects, approximately 80-MW and 19-MW, respectively, will be constructed on separate sites in Decatur County, Georgia. The construction of the Decatur Parkway Solar Project commenced in February 2015 while the 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 entire output of the Decatur Parkway Solar Project is contracted under a 25-year PPA with Georgia Power and the entire output of the Decatur County Solar Project is contracted under a separate 20-year PPA with Georgia Power. 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 acquisition is in accordance with the Company's overall growth strategy.
Kay County Wind Facility
On February 24, 2015, the Company, through its wholly-owned subsidiary SRE, 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. Kay Wind is constructing an approximately 299-MW wind facility in Kay County, Oklahoma. The wind facility is expected to begin commercial operation in late 2015. The entire output of the facility is contracted under separate 20-year PPAs with Westar Energy, Inc. and Grand River Dam Authority. The acquisition is in accordance with the Company's overall growth strategy.
The Company's acquisition of Kay Wind is expected to close in the fourth quarter 2015 and the purchase price is expected to be approximately $492 million, with potential purchase price adjustments based on performance testing. The completion of the acquisition is subject to Kay Wind achieving certain financing, construction, and project milestones, and various customary conditions to closing. The ultimate outcome of this matter cannot be determined at this time.