Cohocton Wind Watch

Monday, April 18, 2016

SunEdison's Complex Finances Make Potential Bankruptcy `Messy'

SunEdison Inc.’s potential bankruptcy would be the biggest ever in the renewable-energy industry, and the largest U.S. failure in more than a year. It also promises to be more complicated than most.

The world’s biggest clean-energy developer had total debt of $11.7 billion as of Sept. 30, the last comprehensive figure it reported, after a two-yearbuying binge of wind and solar assets on six continents. The company is preparing to file in New York, according to a person familiar with the matter.

If it does seek protection from creditors, the proceedings may drag in SunEdison’s two publicly traded holding company units, TerraForm Power Inc. and TerraForm Global Inc. A SunEdison bankruptcy also has the potential to trigger defaults on multiple wind and solar farms that are generating revenue from selling electricity.

SunEdison’s global expansion effort was fueled by a complex web of financing that includes loans from banks and hedge funds, credit lines and the initial public offerings of the TerraForm units. It has seven outstanding convertible bonds, according to data compiled by Bloomberg.

More from Bloomberg.com: The Trucker's Nightmare That Could Flatten Europe's Economy

“It’s going to add much more complexity than normal,” said Brandon Barnes, a senior analyst at Bloomberg Intelligence, in Washington. “You’re dealing with affiliates that may not want to be associated with the parent company.”

Creditor Talks

The company acknowledged in a regulatory filing April 15 that it’s talking with creditors about financing to carry the company through bankruptcy reorganization. Ben Harborne, a SunEdison spokesman, declined to comment for this story.

Potential creditors may also include insurance companies, at least one university and the residential solar installer that SunEdison tried to buy for $1.9 billion, Vivint Solar Inc., which sued for damages after the deal fell apart in March. TerraForm Global is pursuing another suit, alleging that SunEdison misused the holding company’s cash.

Two SunEdison creditors, New York-based hedge fund D.E. Shaw & Co. and Madison Dearborn Capital Partners IV LP, filed a separate lawsuit this month, seeking $231 million from TerraForm Power because SunEdison allegedly has missed some deferred payments as part of a $1.9 billion acquisition in January 2015.

TerraForm Shares

“These developments reiterate our concerns that there is a small, but non-zero, probability that the TerraForm entities might be substantively consolidated into a SunEdison bankruptcy,” said Swami Venkataraman, a Moody’s Investors Service analyst in New York.

“The creditors of SunEdison are going to be in control,” he said. “If that means monetizing the TerraForms’ Class B shares by selling them, so be it. If that means dragging the TerraForms into bankruptcy, so be it.” SunEdison controls the TerraForm units through ownership of Class B shares.

‘Messy’ Process

The companies’ finances will make a potential bankruptcy a challenge, said Greg Jones, an analyst with CreditSights Inc., a New York-based research company.

“It can potentially be more messy,” he said. “It’ll get really complex and complicated real fast.”

SunEdison’s financial structure is so opaque that its own employees have raised questions, and the company is being investigated by the U.S. Department of Justice and the U.S. Securities and Exchange Commission.

The TerraForm units have attempted to distance themselves from their parent.

“TerraForm Power and TerraForm Global do not rely substantially on SunEdison for funding or liquidity and believe that, in the event SunEdison seeks bankruptcy protection, the companies will have sufficient liquidity to support their respective ongoing operations,” said Joseph Sala, a spokesman for both companies.

Energy Future

Some of the SunEdison complications are similar to two recent blockbuster bankruptcies, Energy Future Holdings Corp. and Caesars Entertainment Operating Co. In those cases, conflicts arose over which investors were in control of the process and the appropriate role of parent companies and subsidiaries during reorganization.

Energy Future filed for Chapter 11 in April 2014 listing almost $50 billion in liabilities and spent months devising a plan to split its money-making electricity-distribution arm and unprofitable power generation business in a way acceptable to creditors and the court. Some Caesars creditors are still disputing actions that the parent Caesars Entertainment Corp. took before the operating unit’s $20 billion bankruptcy filing in January 2015.

In the case of the SunEdison-TerraForm ecosystem, the operating power plants are typically their own legal entities with stable, long-term deals to sell power. Some of those contracts have clauses that trigger different types of defaults if SunEdison files for bankruptcy.

“The solar and wind assets are great assets,” said CreditSights’s Jones. “They’re mostly contracted with investment-grade utilities. It’s just the financial situation of SunEdison that got in the way.”

Source

SunEdison planned to go bankrupt as soon as TerraForm Power went public.

When SunEdison began splitting itself up into multiple public companies in what could be one of the most ingenious strategies the business world may have ever seen, if they can get away with it. SUNE builds and/or constructs projects and after a period of time, drops them down into a subsidiary, whether it be TERP or GLBL, who retain call rights on all of the projects anyway.

SunEdison has been forever unwavering on their plans to take over Vivint Solar. It should also be noted that SUNE is the company issuing bonds to VSLR shareholders and not TERP. It should also be pointed out that the filings for the deal actually requires VSLR to pay SUNE a breakup fee, when normally the acquirer would be the one to pay any termination fees. SUNE could walk away from the VSLR deal right now with a profit, but they don’t want to even though it caused their equity to get entirely demolished. Suspicious?

If SUNE can stay alive long enough to finish their deal financing with Invenergy and VSLR, I believe it will fold very shortly after in 2016. If TERP acquires these assets, they will become a growing cash generating machine for the next 15–20 years with not NEARLY as much debt as SUNE has.

After opining on the company’s debt structure, I have come to the conclusion that SunEdison’s pure mission was to raid the debt and capital markets in order to create the strongest renewable energy utility possible as quickly as the market would allow. That time has seemingly run out.

After the Invenergy and VSLR deals close, why wouldn’t SUNE close their doors and file for bankruptcy? I’m no legal expert, but presumably TERP and GLBL will be able to immediately acquire all future drop-down assets from SUNE with no strings attached. Finally, a “new company”, or SunEdison 2.0, could rise from the ashes debt-free and begin collecting massive amounts of cash distributions from the TerraForm sisters. Not to mention this company isn’t exactly as transparent as investors would like with their “private warehouse” subsidiaries that are also generating “X” amount of cash flow in secrecy. If a “SunEdison 2” comes out and begins receiving payments from TERP and GLBL, it would be simply brilliant. SUNE CEO Ahmad Chatilla will most likely be seen as a hero of the green energy revolution if this plays out for rapidly expanding growth of the industry at the expense of the financing system. Maybe he wants to become the Jesus Christ of clean energy and die for the sins of fossil fuel? No clue.

I have no idea if SunEdison can get away with this strategy, but I do believe they obviously have the management capability to take an operation with this strategy this far into the game. I wouldn’t be surprised if this works out in their favor. They, like Valeant, have simply taken advantage of the system provided to them. However, unlike Valeant, SUNE’s management put together a clear exit strategy.

I want to make this clear before I break into another section: I am not a short. It is actually against my investing philosophy to short. That being said, this is obviously a short/bear thesis on SUNE. Like Valeant, I’m advising investors stay away from SUNE as the story has just become too hard and it has no longer become an investment, but a gamble.

What do we do with the now-public daughter companies? Well, the market hates them, that’s for sure. TERP has traded nearly hand-in-hand with SUNE to the downside. Here’s some more disclosure: I am long TERP and continue to be bullish on the name. I don’t want to go into a full-out research piece on the company, but the fact that the companies trade together should be taken advantage of.

As mentioned earlier, if the parent dies, TERP will be in even better shape than before. This appears to me to be the driving reasoning behind SUNE’s bankruptcy strategy. Assuming it acquires SUNE’s completed projects for free all at once, it will have more assets, stronger cash flow, bigger distribution, and no payments to make to SUNE unless it comes back after bankruptcy. Reasonable debt levels with an enhanced ability to pay it off in a SunEdison-ridden world. Interestingly enough, drop-downs from SUNE are becoming less relevant and during their previous quarter it was mentioned less would be dropped down due to lack of market appreciation. As it stands right now, without SUNE, TERP can continue to pay its distribution and pay down debt in a relatively short timeframe (3–5 years is my modest estimation). TERP has sufficient cash flow for the next 10 years at minimum, using their own data from this quarter’s presentation. It is becoming more apparent that SUNE is becoming the leech to TERP, rather than a formerly balanced relationship. TERP reported separately from SUNE this quarter, and the tone and reaction showed that TERP is a very strong renewable utility. Honestly, a larger utility might make a mistake in not snatching it up after SunEdison goes bankrupt, as I assume it will.

I think that about wraps it up. SunEdison is one of my conviction avoid stocks. I’m not saying to short it, I’m saying it is too hard to own. If I’m wrong, oh well. I don’t think I’m wrong, though. TerraForm Power continues to be my solar holding of choice, after the rapid expansion under debt primarily held by SUNE. I believe the market will realize this eventually and see the opportunity TERP provides as a standalone company.

To the SunEdison management: Bravo.

-CaeX, 11/11/2015

Source

The Predetermined Death of SunEdison

I will keep the necessary introduction to the company’s activities relatively as short and sweet as possible, but it is hard. This report is mainly meant to help retail investors understand the full story and grave nature of the situation for SunEdison shareholders.

SunEdison ($SUNE) is a company that installs solar panels, and they do it in very high volumes globally. SunEdison, the company, is one of the leading forces driving the implementation of solar panels across the globe. SunEdison, the stock, is exactly the opposite.

SUNE went from all-time highs to multi-year lows in a few months time, bringing the entire solar sector along with it. The company also has public former-subsidiary companies, which is where the story truly becomes interesting.

TerraForm Power ($TERP) is SUNE’s primarily domestic-focused “yield co.” utility, and a second yield co., TerraForm Global ($GLBL), serves the same function but for emerging market assets. These companies are a key part of my thesis, so let’s keep them in mind.

SunEdison was a key participant of inflating (what I believe we will look back upon in the future) the solar bubble [along with companies like SolarCity ($SCTY)], and ultimately was the needle that popped it. I’m a believer that the industry (and stock prices of most companies) will recover in the distant future, so don’t count renewables out. It’s just been a very long time since the market has had many participants try and build a new industry, and I believe investors became over-exuberated.

This is an industry full of smart CFOs and financial engineering. But, SUNE has been the worst offender. SUNE was seen as a “roll-up”; buying tons of decent assets and companies while raising over $11 billion (yes, billion) in debt. This was somehow overlooked, and as the market cap would increase, so would the debt. Every new deal, every new debt raise, the stock went up to almost mirror the financing. Then, SUNE made “one deal too far” and made a deal with Vivint Solar ($VSLR) to buy the company for less than the VSLR IPO price, and that set off a red flag for investors. And, as the stock continued to fall from the peak the day of that announcement, debt still increased as SUNE continued operations.

So now, here we are just a few months later and the company is worth around $1.5B with still no real dent into the debt payments. Along with the rapid decline in stock price, the yield co.’s stock prices have been nearly equally as damaged.

History lesson over.

Now it is time to focus on the daughter company TerraForm Power. Both TERP and SUNE reported their quarters, 11/9/15 and 11/10/15, respectively, and provided details regarding future deals and projects; normal company-type things. The key takeaway from these conference calls & presentations was actually from the TERP call, where it was mentioned that two deals still have to close by the end of 1H16: The purchase of private company Invenergy’s wind power assets, and also the acquisition of Vivint Solar.

These two acquisitions are key in turning Terraform Power into an even more diverse renewable utility with the addition of more wind turbines and then residential solar. To be clear, in order to be a successful & sustainable business, these assets are not necessary for TerraForm Power. What they do, however, is rapidly grow the distribution paid to Daddy, SunEdison. Currently, SUNE is receiving distributions from TERP, and GLBL will follow [in a time period I don’t recall but don’t care to look up because it won’t matter anyway. It’s in the GLBL IPO filing if you really must know.].

What’s my point? How about I take some time to put all of the pieces together in what I believe to be the correct order. This is a very well-organized game of chess.

My thesis:

Source

Wednesday, April 06, 2016

SunEdison Green Power Bankruptcy Inevitability

http://www.batr.org/negotium/040616.html

For all those sun baked brains that see salvation in renewable nirvana, the imminent demise of SunEdison is the latest case that creative green economics is the path to insolvency. After studying the tangled web of cross collateralization and rehypothecation of debt, the WSJ announcement is inevitable, SunEdison Said to Be Preparing to File for Bankruptcy. “Solar-energy company SunEdison Inc. plans to file for bankruptcy protection in coming weeks, a dramatic about-face for a company whose market value stood at nearly $10 billion in July.”

Take the tour of the SunEdison: A Timeline of the Biggest Corporate Implosion in US Solar History, and understand that the solar and wind industry is founded on a Ponzi scheme of investor hype and government subsidies. Forbes investigates the convoluted and intertwined relationship in Reconsidering The SunEdison YieldCos, TerraForm Power And TerraForm Global.

“The company has been highly levered for some years now and management states that the recent increase in indebtedness will go towards funding of the company’s project pipeline.

Management expects the company to continue to lose money. However, it expects the cash generated by the two yieldcos under long-term contracts will begin to flow as early as the end of this year or beginning next year.”

At this point you must be asking just what is a ”yieldco”? Sun Edison Buying First Wind Scam provides a breakdown and crash course on how SunEdison used their corporate shell game to acquire a long failed and immensely indebted industrial wind scheme, lately known as First Wind.

“The lack of disclosure of ALL the debt for projects that cannot even satisfy minimum interest payments must less retiring the actual obligations, is indicative of an industry that is based upon fraud and uncompetitive costs.”

According to Law 360 the Nov. 2014: SunEdison and TerraForm acquire wind developer First Wind for $2.4 billion, does not tell the entire story.

“TerraForm picks up First Wind’s operating portfolio, which includes 521 megawatts of wind power assets, for an enterprise value of $862 million. That amount includes the equity purchase price, the assumption of debt for First Wind’s operating portfolio, certain swap and debt breakage fees and the purchase of a partner’s ownership stake in certain assets held by First Wind through a joint venture, according to regulatory filings.”

Now you need to enter into the looking glass and examine the rejected filing of First Wind with the SEC for their IPO. The links on Cohocton Wind Watch documents the actual degree of debt that this candidate for receivership held back in 2010. Why is this important?

The latest law suit from the investment banksters who financed First Wind gives the answer in SunEdison Legal Woes Mount With Suits Over First Wind.

“D.E. Shaw & Co. LP and Madison Dearborn Capital Partners IV LP say the funds in the TerraForm Power matter are owed as deferred payment for SunEdison’s $1.9 billion purchase of First Wind Holdings LLC in January 2015, and will be due “immediately” if SunEdison files for bankruptcy or restructures its debt, according to the suit filed in the Supreme Court of the State of New York.

First Wind was one of SunEdison’s biggest purchases, and made it the world’s biggest renewable-energy company. It was part of a massive buying spree that racked up $11.7 billion in debt by the end of September and helped drive the company to the edge of failure.”

Well, the immediate implosion of the SunEdison house of cards follows the same pattern of the crooked First Wind operation that cooked the books for years. Start with the notice that SunEdison In More Hot Water As SEC Investigation Begins & Bankruptcy Looms, “US Securities and Exchange Commission (SEC) has begun its own investigation into the company’s disclosures to investors about its liquidity” and add in the Bloomberg reports that SunEdison Receives U.S. Subpoena on Vivint Deal Gone Wrong.

“The Justice Department’s subpoena comes about three weeks after the deal with Vivint, a takeover that drew the ire of billionaire investor David Tepper, was canceled. Vivint sued SunEdison shortly after, saying its officials had failed to meet financial obligations and work toward consummating the merger. SunEdison auditors had meanwhile started investigations into allegations made by former executives and a current employee about the accuracy of the company’s “anticipated financial position.”

The circular accounting circles never seem to reconcile. Just maybe the basic economics used to finance these dubious energy companies need a thoroughgoing over examination by the regulatory agencies and financial community.

Read closely the delusional flimflam From a SunEdison Press Release:

"TerraForm Power's acquisition of the Invenergy wind plants leverages the power of SunEdison's platform which was enhanced with our acquisition of First Wind in January of 2015," said Ahmad Chatila, SunEdison chief executive officer and TerraForm Power chairman. "The Invenergy transaction creates significant value for our shareholders through the accretion in our TerraForm Power ownership and the acceleration of our Incentive Distribution Rights (IDRs). Together with TerraForm Power, SunEdison's development platform will change how energy is generated, distributed and owned around the world."

No wonder that the SEC is investigating “the company’s disclosures to investors”. The public needs to wake up to the facts that the solar and wind industry promises much and delivers little. Anyone remember Solyndra and Evergreen Solar?

Who else but the Motley Fool to sum up the lesson of another failed “Green” utopian environmental illusion, What Happens to SunEdison Inc If It Goes Under?

“Here's the biggest question in a potential SunEdison bankruptcy: What is the renewable energy development business worth?

In theory, developing renewable energy projects should drive everything from the O&M business to yieldcos. But developing projects requires a lot of money, including debt, which SunEdison has found out the hard way. If that funding dries up, so does the business.”

Learn well and remember long. Generating electricity based on government subsidies is a fool’s game. Allowing quick buck artists to become developers and pitch their convoluted and Byzantine yieldco “re-use” collateral pledges is pure fraud. The public is continually being duped by opportunists, who are more skilled at ripping off the investor than producing any usable electricity. The forthcoming bankruptcy of SunEdison is another sign that energy policy under the cult of renewable production is not economically feasible.

For additional evidence that SunEdison’s Subsidy-Fueled Collapse, Robert Bryce nails the problem with a failed governmental energy policy.

“The biggest federal handouts — two of them totaling $200 million — were made in 2010 and 2011 to a subsidiary of SunEdison, First Wind, for the Milford Wind project in Utah. In addition to the federal subsidies, SunEdison got $30 million in subsidies from various state authorities, including $21 million from governmental entities in New York. On top of that, SunEdison also received $846 million in federal loans, loan guarantees, tax-exempt federal bonds, and federal insurance. The total government support for SunEdison comes out to $1.5 billion.”

The effort to shut down coal generation, decommission nuclear plants, limit hydro facilities and restrict natural gas turbines all lead to higher electric costs and ultimate brown outs. The true cost of continuing down this road of electric burn out by underwriting uneconomical “feel good” projects is punitive and ridiculous.

A SunEdison bankruptcy reshuffling is not about cancelling debt, but needs to be the liquidation of assets and accountability for fiduciary malfeasance. What does it take to admit that the renewal experiment is a bust? Cut the “Green” loses and get on with the business of generating reliable energy.

James Hall – April 6, 2016

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Wednesday, March 30, 2016

SunEdison stock plunges amid report of possible bankruptcy filing, SEC probe

SunEdison Inc., a leading solar-power company saddled with nearly $10 billion of long-term debt, is at risk of filing for bankruptcy protection, one of SunEdison’s affiliates said Tuesday.

SunEdison also reportedly is being investigated by the Securities and Exchange Commission over whether the company might have overstated to investors how much cash it had on hand in November.

In response to both developments, SunEdison’s already battered stock plunged further to less than $1 a share. The stock fell 69 cents, or 55 percent, to close at 57 cents a share Tuesday. At midday Wednesday, the price per share was 59 cents.

Last July, SunEdison was trading above $31 a share. At that point, SunEdison had a market value of $10 billion; it’s now about $400 million.

Based in Maryland Heights, Mo., SunEdison provides systems using solar power and other renewable energy. The company also has solar research and development facility in Belmont, Calif. It also developed wind farms in Maine.

The firm has two so-called yieldcos, TerraForm Global Inc. and TerraForm Power Inc., that raise money from public investors to buy power assets from developers and sell power to utilities to generate steady dividends for those investors.

TerraForm Global, in an SEC filing Tuesday, said SunEdison’s “liquidity difficulties” mean that “there is a substantial risk that SunEdison will soon seek bankruptcy protection.”

SunEdison has yet to report its financial condition as of the end of 2015. Earlier this month, the company delayed filing its full-year results because it found “material weaknesses in its internal controls over financial reporting.”

In its most recent quarterly filing, for the three months ended Sept. 30, SunEdison reported that its long-term debt had swelled to $9.8 billion from $5.9 billion nine months earlier.

On a Nov. 10 earnings call with analysts, SunEdison said it had $1.4 billion of cash. But the SEC is looking into whether SunEdison overstated its liquidity, the Wall Street Journal reported, citing unidentified people familiar with the matter.

Those sources said much of that cash already was earmarked for project construction or debt service and thus couldn’t be accessed by SunEdison, the newspaper reported.

The SEC declined comment, and SunEdison said it was not commenting on either the reported SEC probe or the TerraForm Global filing.

Through the first nine months of 2015, SunEdison posted a loss of $919 million on sales of $1.25 billion.

Source

The World’s Largest Green Energy Company Is Facing Bankruptcy

SunEdison, which bills itself as the world’s largest green energy company, may soon file for bankruptcy protection, according to a recent Securities and Exchange Commission filing, as the company faces “liquidity difficulties” despite getting millions in government subsidies.

An SEC filing from TerraForm Global, a unit of SunEdison, claims “due to SunEdison’s liquidity difficulties, there is a substantial risk that SunEdison will soon seek bankruptcy protection.” Both SunEdison and TerraForm are delaying the filing of their annual financial report to the SEC.

News of SunEdison’s impending bankruptcy filing comes after the company’s shares fell 95 percent in the past 12 months, with shares now trading for less than $1 for the first time since the green energy company went public in 1995. SunEdison’s market value fell from $10 billion in July 2015 to around $400 million today.

The news also comes after the SEC announced it was launching an investigation into SunEdison’s disclosures to shareholders regarding the company’s liquidity. SEC enforcement officials “are looking into whether SunEdison overstated its liquidity last fall when it told investors it had more than $1 billion in cash,”according to The Wall Street Journal.

SunEdison builds “advanced solar technology and develops, finances, installs and operates distributed solar power systems,” according to the company’s website. But this solar company has gotten millions from U.S. taxpayers.

The pro-labor union group Good Jobs First reported last year that SunEdison and its subsidiaries got nearly $650 million in subsidies and tax credits from the federal government since 2000. It was the 13th most heavily-subsidized company in America.

This includes nearly $4.6 million in subsidies from the Department of Energy and Department of Treasury. Watchdog.org reported in October 2015 that SunEdison had gotten nearly $4.6 million from the Obama administration, including funding to build semi-conductors. A SunEdison bankruptcy could leave taxpayers on the hook for more than $2 billion.

SunEdison isn’t the only green energy company to fail after getting generous taxpayer support. Abengoa, a Spanish green firm, has been in dire financial straits for months, and recently got a 7-month deadline to right its finances from a Spanish bankruptcy judge.

In total, Abengoa has gotten more than $605 million in taxpayer support, according to Good Jobs First.

The most iconic green energy failures, Solyndra and Abound Solar, cost U.S. taxpayers hundreds of millions of dollars.

Solyndra got $535 million in loan guarantees from the Obama administration, but declared bankruptcy in 2011. Abound Solar declared bankruptcy in 2012 after drawing down on $70 million of its $400 million loan guarantee from the federal government.

A Daily Caller News Foundation investigation based on internal documents and testimony from sources within Abound Solar found the company was knowingly selling a faulty, underperforming product, and may have mislead lenders at one point in order to keep itself afloat.

The company knew its panels were faulty prior to obtaining taxpayer dollars, according to sources, but kept pushing the product out the door in order to meet Department of Energy goals required for their $400 million loan guarantee.

Source

Thursday, March 24, 2016

Farmers at Adams meeting get details about proposed wind project

ADAMS — Farmers squeezed between falling milk prices, high land values and rising costs of feed and equipment gathered in the fire hall Wednesday night to hear whether they might hope for a measure of salvation in the form of wind energy lease payments.

William M. Moore, principal of Hudson Energy Development, said a wind project across Henderson, Hounsfield, Adams, Rodman, Ellisburg and Lorraine could become the largest wind-energy facility in the eastern United States if the project can clear regulatory hurdles and the court of public opinion.

He was speaking to the choir, however, as it was clear the more than 20 farmers at the get-to-know-you meeting had pretty much made up their minds that the potential gains from wind-tower leases of up to $12,000 per year per tower would go a long way toward a much rosier financial picture down on the farm.

Mr. Moore laid out a project stretching from, roughly, the Oswego County line in Ellisburg north to very near Route 12F in the town of Hounsfield. That creates a potential footprint that is more than 20 miles north to south and up to 9 miles west to east. The preliminary area map takes towers from very near the Lake Ontario shore to east of Interstate 81. While Mr. Moore didn’t know the area of the project map, he agreed it was “pretty big.”

That would be in keeping with the production goals sketched out by the developer; Mr. Moore said the project, producing 3 to 3.5 megawatts per tower, could have a 400-megawatt faceplate capacity.

The developer said that while wind values in the project area don’t match those at the top of the Tug Hill Plateau, where the Maple Ridge wind facility is located, advances in technology are allowing greater production of electricity from lower wind velocities.

Some of that, he said, comes from improvements in the generators themselves. But much of it comes from much larger blades attached to much higher towers. The result might be towers from 600 to 700 feet tall on future projects, although he did not predict a specific height for the project planned for southern Jefferson County.

There are hurdles beyond the regulatory requirements the project needs to clear. The biggest leap is the state of existing transmission capability. The Independent System Operator has identified the north country, especially in Jefferson County, as an area badly underserved in transmission capacity. The county has three 115 kilovolt lines, including one that comes out of National Grid’s outer Coffeen Street generating station.

But Mr. Moore said that the county’s barely high voltage lines are old, with towers in poor shape, and likely could not handle a 400-megawatt project.

Hudson Energy’s solution, Mr. Moore said, was a plan to help National Grid upgrade the transmission capacity, which would create a path for the project’s electricity and improve the electrical infrastructure in the county at the same time.

“This is not a great place for a wind farm because you don’t have a place to plug it in, if you will,” Mr. Moore said. “But an upgrade to the transmission lines would create a transmission solution.”

While he was unwilling to say just what Hudson Energy’s solution is, he said “You can’t build a small project and spend a lot of money upgrading the transmission system.”

In his 400-megawatt vision, Mr. Moore said towers could be spread a mile or more apart. This would create fewer turbines to pass around to more landowners, dimming the prospects for multiple lease payments for all but the largest property owners.

“An easy way to deal with that would be to create a wind zone, where everyone within the zone would share in income from the towers,” Mr. Moore suggested.

Emphasizing the total economic benefits to the region, Mr. Moore dangled $50 million a year in total project payments to the region, including leases and local tax benefits.

However, he said the project could not work without a 20-year payment-in-lieu-of-taxes agreement signed by the county, all the affected towns and all the school districts with the project boundaries.

And he said he did not know what kind of in-lieu-of payments would be arranged, saying that is a critical part of the negotiating process.

Several of the farm owners put a glass-half-full take on PILOT payments, saying that any increase would be better than the straight farmland payments the taxing districts are now receiving.

With county Legislators Patrick Jareo and Jeremiah Maxon sitting in, several speakers criticized the Legislature’s growing opposition to high-value tax abatements for wind farms. Many of the same speakers criticized the Watertown Daily Times — or as one farmer said, “the folks up on Washington Street” — for its treatment of the PILOT issue.

Mr. Moore also, in answer to a question from the floor, said that while the goal of the state’s Article 10 “one-stop permitting” for energy projects is to take permitting decisions to the state level, local opposition to the plan could present challenges.

“It gets sticky unless you have townwide and countywide support,” Mr. Moore said.

Hudson Energy will continue to assess support for the project, although it was pretty clear the group that met Wednesday night was pretty much all on board. Mr. Moore said there would be further community meetings in the future to talk about the proposal.

Source

Tuesday, March 15, 2016

Sentencings for Dean Skelos and Sheldon Silver Are Now Set for Same Day

The two recent public corruption trials in Manhattan — of Sheldon Silver, the former State Assembly speaker, and Dean G. Skelos, the former State Senate majority leader — were notable, among other reasons, for their timing. At one point, both trials moved ahead almost in sync, in federal courthouses near each other, each drawing crowds of spectators and reporters.

Now both former politicians will be sentenced at precisely the same hour on the same day.

On Monday, Judge Kimba M. Wood of Federal District Court issued an order rescheduling Mr. Skelos’s sentencing for 10 a.m. on April 13. Another judge, Valerie E. Caproni, who presided over Mr. Silver’s trial, had already set that time and date for his sentencing. Mr. Silver, a Democrat from Manhattan, was convicted of corruption charges on Nov. 30.

A court filing shows that the new sentencing time for Mr. Skelos, a Republican from Long Island, and his son, Adam, who were convicted on corruption charges in December, came after the United States attorney’s office for the Southern District of New York wrote to Judge Wood, proposing the new date and time after saying they had consulted with the Skeloses’ lawyers.

Was there some strategic reason for the two sentencing hearings to occur at the same moment? A government official said on Monday that the timing was purely coincidental. And a federal court spokesman added: “There is no master calendar. Each judge is responsible for their own scheduling.”

Lawyers in the two cases either could not be reached for comment or declined to comment on Monday. But given the fluidity of court cases and the flurry of legal motions expected to be filed before the sentencing hearings occur, it seems quite likely that one or both of the dates will end up being moved, yet again.

Source

Thursday, December 31, 2015

December 30 (SeeNews) - In exchange for the extinguishment of USD 336 million (EUR 307.6m) of debt, SunEdison Inc (NYSE:SUNE) has agreed to transfer certain green energy projects under development and shares in its first yieldco to DE Shaw group, Madison Dearborn Capital Partners IV LP and Northwestern University.

Under a deal signed on December 29, about USD 336 million aggregate principal amount of 3.75% guaranteed exchangeable senior secured notes due 2020 will be extinguished.

The first portion of notes to be cancelled amounts to USD 121 million. In return, DE Shaw and the other two buyers will get 12.16 million shares in TerraForm Power (NASDAQ:TERP). The yieldco’s stock closed at USD 12.19 on Tuesday.

The remainder of exchangeable notes will be extinguished after the transfer of renewable energy projects under development has been concluded. That is planned to happen in two tranches with deadlines of April 1, 2016 and June 1, 2016. Details on the said projects were not revealed.

“We believe this was a mutually beneficial solution to deleverage our balance sheet by selling our under development assets as well as the Company's shares of TerraForm Power,” said SunEdison’s chief financial officer Brian Wuebbels.

The agreement is subject to customary closing conditions and also contains customary representations and warranties in respect of the projects being transferred and other matters.

In addition, SunEdison said it would make certain earnout payments to DE Shaw Composite Holdings LLC and Madison Dearborn between March 30, 2016 and March 30, 2017. The earnouts are related to the acquisition of First Wind Holdings LLC, which SunPower and TerraForm Poweragreed in November 2014.

(USD 1 = EUR 0.915)

SunEdison, TerraForm to snap up First Wind in USD-2.4bn deal

http://renewables.seenews.com/news/sunedison-terraform-to-snap-up-first-wind-in-usd-2-4bn-deal-449087

(SeeNews) - Nov 18, 2014 - US solar energy firm SunEdison Inc (NYSE:SUNE) and its yieldco unit TerraForm Power Inc (NASDAQ:TERP) have agreed to buy First Wind Holdings LLC for up to USD 2.4 billion (EUR 1.9bn).

The definitive deal marks SunEdison's entry into the US wind energy market. The move will make the buyer the “leading global renewable energy development company,” it said in a press release on Monday.

SunEdison now expects to install between 2.1 GW and 2.3 GW of renewable energy capacity in 2015, as compared to 1.6 GW-1.8 GW forecast previously. Meanwhile, TerraForm lifted its 2015 cash available for distribution (CAFD) guidance for 2015 to USD 214 million from USD 156 million, while the 2015 dividend is seen at USD 1.30 per share, or 44% higher than its current dividend rate of USD 0.90 per share.

The purchase will consist of a USD-1.9-billion upfront payment plus an additional USD 510 million in earn-outs dependent on the completion of certain projects in First Wind's backlog.

The deal is subject to customary conditions and regulatory clearance and is anticipated to close in the first quarter of 2015. Following completion, SunEdison will become owner of over 1.6 GW of pipeline and backlog projects that have been added to TerraForm Power's call right project list. The schemes are scheduled for completion in 2016-2017. TerraForm will get 521 MW of contracted wind generation assets to its portfolio for an enterprise value of USD 862 million.

The acquisition, which will be backed by bridge financing, includes an additional 6.4 GW of “project development opportunities,” SunEdison said. For TerraForm, in particular, the deal is expected to be immediately accretive and fetch USD 72.5 million in unlevered CAFD to the company next year.

(USD 1.0 = EUR 0.802)

Friday, November 20, 2015

NY’s Madison Wind Farm a cautionary tale

As it turns out, the wind-power shell game has nabbed its first municipal victim, in a big way.

The Madison Wind Farm, town of Madison, county of Madison, has told town and county officials that come Jan. 1, when its 15-year payment-in-lieu-of-tax agreement expires, it simply won’t be able to pay any more than it has over the past 15 years. That princely sum? A paltry $60,000 a year split between the school district and the town. The county generously agreed to forgo any payments, figuring it would get its reward when the PILOT was done.

Well, in a way it will. There is a good chance Madison County will end up owning seven aging, obsolete wind towers that developers have made good money on at taxpayers’ expense. If that happens, the county, yet to see a dime, might be the first decommissioners of an old wind farm in the state. I am guessing it is ill equipped to do that.

There are wind farms in California that have reached this end stage of their lives, and most of them are sitting silently in the desert, blades permanently stilled, nacelles rusting and choked with sand and towers aged out of use. Nobody is taking them down probably because, like Madison County, some slicked-back corporate con man skinned local officials right out of their shorts with promises of revenue and green power.

Revenue went to the developers, much of it in the form of production tax credits and property tax exemptions, and green power at less than 30 percent of the nameplate rating went out when the wind was blowing hard enough (while coal, gas and nuclear plants were forced to keep their turbines spinning because wind, you know, isn’t steady). It was a good deal for some, but for the people it was the Big Con.

Now, next up in New York to reach that magic old age of 20 will be Maple Ridge Wind Farm in Lewis County. That is no Madison Wind Farm. Maple Ridge is the granddaddy of the eastern half of the country, with more than a hundred windmills scattered across the Tug Hill plateau, their towers and blades visible from the town of Rutland to well below Martinsburg. And these are the short towers; the new towers are about twice as tall.

Liz Swearingen, Lewis County’s savvy county manager, understands the ramifications. Through the Maple Ridge PILOT, the municipalities, Lowville Academy and Central School, and the county have realized big payouts over the 15 or so years of the PILOT so far, and those payments will continue until 2021. She acknowledges, however, that no one knows what will happen then.

Technology has passed Maple Ridge by just as it has every wind farm built in the early part of this century. Bigger, more efficient, more reliable wind mills allow developers to generate more power with less wind and to achieve a larger percentage of their nameplate power.

And still, these wind farms are simply not viable without massive subsidies, including a singular commitment from local taxpayers. For towns and counties and school districts, these projects are all gamble and no payout.

The only reason Maple Ridge hasn’t pinched Lewis County is that its PILOT is subsidized by an old program through Empire State Development that allowed businesses in the now defunct Empire Zones to pay local taxes and be reimbursed by the state. That long-gone program won’t help anyone anymore, so what will happen with Maple Ridge after all the Monopoly money is gone is anyone’s guess.

Ms. Swearingen said that Lewis County has a strong decommissioning agreement in place with the owners of Maple Ridge. But these owners are not the ones who signed the document, and no one ever went broke being skeptical about agreements with wind developers. It may be difficult for Lewis County to impose an agreement on a giant corporation headquartered in Spain.

Lewis County is at least aware of the risks it faces. Ms. Swearingen is working hard to tighten the county’s budget so that it relies less on fund balance to save the tax levy, which may give it the wherewithal to weather any storm the end of Maple Ridge’s PILOT kicks up. End of life is never pretty, and it is particularly ugly for wind farms.

Source

Sunday, November 15, 2015

End of life is never pretty

As it turns out, the wind-power shell game has nabbed its first municipal victim, in a big way.

The Madison Wind Farm, town of Madison, county of Madison (kind of a trend here), has told town and county officials that come Jan. 1, when its 15-year payment-in-lieu-of-tax agreement expires, it simply won’t be able to pay any more than it has over the past 15 years. That princely sum? A paltry $60,000 a year split between the school district and the town. The county generously agreed to forgo any payments, figuring it would get its reward when the PILOT was done.

Well, in a way it will. There is a very good chance Madison County will end up owning seven aging, obsolete wind towers that developers have made very good money on at taxpayers’ expense. If that happens, the county, yet to see a dime, might be the first decommissioners of an old wind farm in this state. I am guessing it is ill equipped to do that.

Source