Question
From:
(Redacted)
Sent:
Wednesday, September 08, 2010 3:05 PM
To:
Verne, B. Michael
Cc:
(Redacted)
Subject: RE:Testing of generating facility
Mr. Verne:
We would begrateful for your advice on the following fact pattern~ and whether thistransaction (considering the facts presented in both paragraphs below) wouldqualify for the 802.2(a) exemption:
Company A isconstructing a wind energy project through a wholly owned project entity withthe intent to sell it. Company A intends to enter into an acquisition agreementwhere Company B will acquire all of the membership interest ol the projectentity for total consideration in excess of the HSR threshold amount. Theparties anticipate the closing will occur prior to the date the project hasproduced any income, except for income generated from the sale of energyproduced in connection with testing the wind energy project before it iscommercially operational. As between the parties, Company B would have theright to receive the income from the test energy. Based on previous informalinterpretations by the PNO staff, the parties believe, but are seeking confirmation,that the income generated from the sale ol the test energy before the windproject is operational will not prevent the parties from relying on the"new facilities" exemption under 802.2(a). Could you please advise onthat question?
Secondly, underthe proposed acquisition agreement, Company B would have an option to delay theclosing for up to sixty days after the date the project has achieved commercialoperation. If the closing has not occurred as of the date on which the projectbecomes operational, the parties are contemplating closing the transaction intoescrow whereby the project entity and all income generated by the wind energyfacility after commercial operation would be escrowed and would be owned byCompany B upon its satisfaction of the escrow conditions. The escrow periodwould not exceed sixty days. The parties are wondering if there is still anexemption here under 802.2?