The privately held Infrastructure Investments Fund (IIF) completed its acquisition of El Paso Electric (EPE) on Wednesday following a final regulatory check by the Nuclear Regulatory Commission, the companies said in a statement.
The statement came after FERC on July 22 approved EPE’s and IIF’s market power mitigation plan and rejected rehearing requests challenging the commission’s approval of the deal (EC19-120). (See FERC OKs El Paso Electric Mitigation.)
The commission in March approved the transfer to IIF of EPE’s license for the company’s share of Palo Verde, but it recently sent a letter to the organizations with questions about the ownership (STN 50-528, STN 50-529, STN 50-530, 72-44).
NRC had questions about possible “foreign ownership, control or domination” of EPE’s 15.8% share in the renewed operating license for the Palo Verde nuclear plant in Arizona. On July 28, however, the agency said in a letter to the utility’s interim CEO that a previous order approving the transaction still stood.
Staff said that following a brief review, they had determined not to modify, suspend or revoke the order, but that “future changes to the … partnership agreement that affect the restrictions on passive limited partner investors may constitute an indirect transfer of control of the Palo Verde licenses that would require prior NRC approval.”
Scott Burnell, an NRC public affairs officer, told RTO Insider in an email that staff began reviewing the EPE and IIF responses July 27 to determine whether the agency needed to take further action on the transferred license.
Burnell noted that staff recently learned about the possible foreign ownership ties to IIF entities linked to the transaction through filings the private equity group made with the U.S. Securities and Exchange Commission and the Federal Communications Commission.
The company said July 29 that its new board of directors had appointed Kelly Tomblin as its new CEO. Tomblin joins the company after more than 30 years of leading utilities in the U.S. and internationally. She was most recently CEO of INTREN, a utility solutions provider with 14 regional offices across the U.S.
“EPE plays a critical role in the communities [it] serve[s], and I look forward to making this community my own,” Tomblin said in a statement.
EPE and IIF announced the transaction in June 2019. IIF is a $12.5 billion private investment vehicle advised by a dedicated infrastructure company investment group within J.P. Morgan Investment Management.
IIF is the umbrella name referring to the three master partnerships that hold all of its investments: IIF US Holding 2, IIF US Holding and IIF Int’l Holding. IIF US Holding 2 owns Sun Jupiter Holdings, which has formed a corporation to merge with EPE, with the utility as the surviving entity.
EPE shares disappeared from the New York Stock Exchange on Wednesday. The stock closed at $68.25 on Tuesday, up $1.85 since hitting $66.40 on July 20 before FERC’s final approval.
