Question
From: (redacted)
Sent: Monday, August 04, 2008 9:59 PM
To: Verne, B. Michael
Subject:7(A)(c)(4); 802.2(c) Exemptions - Power Plant Project
Mike,
We have atransaction in which a general law city plans to sell up to 100% of itsownership interests in a power plant project that has not yet commencedconstruction. The size-of-transaction and size-of-parties thresholds areexceeded. Assets included in the sale will include the city's interest in realproperty, permits, and contracts (e.g., purchase of power generation equipmentand related services, development, engineering, procurement, and construction).The city is currently negotiating grid interconnection arrangements with theindependent system operator.
The city ispursuing a program to develop Community Choice Aggregation entities (CCAs")for its residences, businesses and municipal facilities as well as thoselocated in neighboring jurisdictions. The CCAs, which are authorized understate law, will provide an alternative to the wholesale electric market for theoutput of the project. The city plans to negotiate rights to a portion (up toand including 100%, if economically justified) of the power output from theproject to serve CCAs under reasonable terms and conditions either through acontract or through a small minority ownership position.
Would you pleaseconfirm that the city is entitled to the 7(A)(c)(4) political subdivisionexemption (i.e., not an "entity") as well as the 802.2(c)unproductive real property.