Challenge
One of the USA’s largest electricity producers, AEP’s long-term strategy is to diversify away from fossil fuels into renewables and by 2030 cut its CO2 emissions by 70% from 2000 levels. The purchase by AEP Clean Energy Resources of Sempra Renewables for $1.05 billion was a significant deal that would align with this strategy and establish them as a leading player in the renewables sector.
The purchase included seven wind farms and a battery storage project located in seven states held by Sempra Renewables through 30 subsidiary companies. Five of the windfarms were also held in joint ventures with BP Wind Energy which will continue following closing.
In addition to Federal Energy Regulatory Commission (FERC) and Hart-Scott-Rodino anti-trust approvals, consents and replacement security arrangements were required with dozens of entities, including lenders, tax equity and the power offtake counterparties, through approximately 100 separate agreements.
The acquisition of the business created the opportunity for AEP to interview and hire several employees from Sempra Renewables wind organization based in San Diego, which brought with it unique California employment law issues to resolve, including restrictions on information that can be requested from, and the terms of offers to, potential employees.
A renewables deal of such magnitude and complexity was a first. AEP had to diligence a complex holding and finance structure in a compressed time period in order to be the successful bidder in a very competitive marketplace.
The client needed a legal partner with a deep understanding of its objectives and approach to risk. Randy Ryan, Associate General Counsel at AEP, turned to BCLP Partner, Steve Richardson, to lead an experienced and agile BCLP team to represent them in the transaction.
