Are Everpower and Invenergy in “cahoots” in Ohio?

Is there a connection? Read the facts below and decide for yourself…

Everpower:  Terra Firma Capital Partners is the UK private equity firm that owned three renewable companies: RTR, Infinis and Everpower.  Their business model is to buy companies, build them up and sell them.  Terra Firma likes to do this within five to seven years and they like to earn a 15% or more return on their investments.   In 2013, Infinis was spun off as a separate company in an IPO.  Terra Firma did not make what they hoped to on this sale but still netted over $140 million.

At the same time, Terra Firma reported that it might take them a bit longer to exit their other investments like Everpower.   Now comes the news of a shake-up at Terra Firma and a new Manager for Everpower, Stefan Thiele.  What does this mean?  We can only speculate but we do know that Everpower was forced to abandon their Allegany project after losing a court suit they filed against the town of Allegany, NY;  one of the customers of their Cambria County, PA wind farm just went bankrupt;  Champaign County’s ongoing fight against the Buckeye Wind project caused Everpower to miss the deadline for federal Production Tax Credit subsidies (although the subsidy could get reauthorized in 2014); the Scioto Ridge project PILOT subsidy is in question due to community outcry and resistance.   And to top it off, the mandate to buy Ohio generated wind is in question.  This all adds up to some spectacularly bad news for Everpower and Terra Firma’s ability to sell it off.  New management has been tapped. Worse yet, Terra Firma’s plan to raise $2 billion to create a new renewable energy fund is floundering.   Perhaps Terra Firma planned to dump Everpower and RTR into the new fund, we do not know.   The situation in the European Union is making things even worse as renewable energy mandates are being rolled back or perhaps junked.

Invenergy: You will recall that Invenergy sold their Champaign County assets (leases) to Everpower.  They announced that their focus was shifting to the Northwest in places like Oregon and Washington.  Now this week they resurfaced in Hardin County where they still retain ownership of leases for 23,000 acres in Marion, Lynn, Roundhead, McDonald and Cessna townships.  Prior to the end of 2013,  Invenergy bought an inventory of G.E. wind turbines and they are now deciding where to place them.  Because the turbines were acquired in 2013, they can qualify under the safe harbor provisions of the Production Tax Credit and are eligible for the federal subsidy.  Invenergy announced this week that Hardin County is a leading contender for placement of these turbines.  Two things could stand in their way.  If the Hardin County Commissioners rescind their Alternative Energy Zone designation, it would cause Invenergy to go elsewhere.  Also, if they fail to find a buyer for their wind, they would not build.  If the mandate to buy Ohio wind is repealed, it may be impossible to find a buyer for Invenergy’s wind. There is much to think about here.  If Everpower has missed the PTC window, do they have a deal under discussion with Invenergy to go forward and then sell the project to Everpower like they did in Champaign County?  We wonder.   G.E. has come out with new and bigger turbines for low wind areas.  If these are the turbines Invenergy has purchased, they would require longer setbacks.  We think Invenergy’s announcement that it has “improved” setbacks is probably meaningless…

 

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