Competitive Power Ventures, Inc. - Energy Highway

CPV VALLEY ENERGY CENTER
Generation facility and current management of 1,080MW in New York’s electric and gas markets
demonstrates its understanding of the market rules and procedures.
CPV Valley’s successful navigation of the NYISO interconnection process from the NYISO’s Feasibility
Study through its Class Year Facilities Study process is further demonstration of CPV’s experience and
ability to adhere to New York market rules and procedures. In the course of completing the System
Reliability and Impact Study (SRIS) process, CPV Valley impacts have been quantified and were
determined to be minimal. CPV Valley’s completion of the Class Year Facilities Study determined the
Project would be deliverable with relatively minor upgrades on the system.
Finally, CPV’s Valley Energy Center has successfully navigated New York’s SEQRA process.
Understanding and adhering to state procedures was fundamental to CPV completing the SEQRA
process for the CPV Valley Energy Center in May of 2012.
4.0 Financial
4.1 General Financial Structure
The Project is owned by CPV Valley Energy Center, LLC, which is an indirect wholly owned subsidiary
of Competitive Power Ventures Holdings, LLC (CPVH). CPV is majority owned by Warburg Pincus, with
participation by CPV management and other individual accredited investors. Since the late 1980's,
Warburg Pincus has invested more than $6 billion in energy companies around the world and has
backed CPVH for over a decade.
4.2 Financing Structures
CPV Valley’s finance plan addresses the Project’s three distinct periods of activity: development,
construction, and operations. During development, CPV Valley’s sponsors will contribute the required
equity to fund 100% of the capital needs of the Project. Raising debt financing for the CPV Valley
Energy Center is predicated on a solution beyond that currently offered in the NYISO market. CPV
Valley is flexible and willing to work with the state of New York in developing a structure that provides
the greatest value to the New York ratepayers. However, in order to effectively raise the private
capital to start construction of the CPV Valley Energy Center, CPV Valley would require some form of
surety of future revenues in the form of a long-term contract.
Upon commencement of construction, which is expected coincident with the financial closing of
credit facilities for CPV Valley, construction funding will be sourced through a combination of nonrecourse
credit facilities provided by third party lenders and equity contributed by Project sponsors.
The debt funding during construction is projected to be in the form of either a commercial bank miniperm
construction loan converting to a term loan upon the Commercial Operations Date (COD), or a
long-term construction/term financing executed in the institutional/private placement markets. The
commercial bank market and the institutional/private placement markets each represent viable
financing alternatives and the competitiveness of each will continually be assessed as the Project
nears financial closing.
The foregoing provided a summary of potential financing structures based on assumptions regarding
the surety of the revenue stream. The ultimate contractual structure of the revenue stream and
future market conditions will shape the actual financial structure. However, CPV has successfully put
into construction multiple clean generation projects by raising over $1 billion of private financing in
the past 12 months and feels confident that with an effective long-term contract it will be possible to
raise the necessary financing to construct CPV Valley.
5.0 Permits and Approval Process
CPV Valley has achieved one of the most significant milestones in the New York SEQRA approval
process. CPV Valley’s SEQRA Findings Statement was adopted by the lead agency in May of 2012.
Since New York law precludes state agencies from taking action until SEQRA is complete, other project
New York Energy Highway
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