Renewable Power Producer To Acquire Retail Supplier

September 1, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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UP Power Marketing, LLC ('UPPM' or the 'Applicant'), which had served as a retail electric supplier in Michigan, filed an application at FERC for the disposition of UPPM’s jurisdictional facilities in connection with the sale of the ownership interests of UPPM (as described further below, the 'Proposed Transaction').

As a result of the Proposed Transaction, L’Anse Warden Electric Company, LLC ('LWEC' or 'Buyer') will directly own 100% of the Membership Interests in UPPM. LWEC is a unit of Convergen Energy, a renewable power and fuels producer

UPPM is a limited liability company organized under the laws of Delaware with its principal place of business in Michigan. UPPM is a wholly owned direct subsidiary of PM Power Group, Inc. ('PM Power Group'), a Delaware corporation. PM Power Group in turn is a wholly owned subsidiary of PPS USA Holdings, Inc. ('PPS USA Holdings'), a Michigan corporation, which in turn is a wholly owned subsidiary of PM Michigan Inc. ('PM Michigan'), also a Michigan corporation (collectively, PM Power Group, PPS USA Holdings, and PM Michigan are referred to as the 'Current Owners').

UPPM is a wholesale power marketer and a licensed Alternative Electric Supplier in the State of Michigan. UPPM does not own or control any electric generation, transmission, or distribution facilities. FERC has authorized UPPM to sell energy, capacity, and ancillary services at wholesale at market-based rates, and its jurisdictional facilities are limited to its market-based rate tariff and associated books and records. UPPM purchases power from Buyer, and resells it to Certainteed Ceilings Corporation ('Certainteed') pursuant to a certain electrical supply agreement (the 'Certainteed Agreement').

PM Power Group also owns 100% of the equity interests of White Pine Electric Power L.L.C. ('White Pine'). White Pine is a Delaware limited liability company that owns and once operated a 60 MW gas-fired electric generating facility located in White Pine, Michigan ('White Pine Facility') which is interconnected to the American Transmission Company in the Midcontinent Independent System Operator, Inc. ('MISO') balancing authority area ('BAA'). Prior to its retirement in 2016, the White Pine Facility consisted of three generating units with an aggregate nameplate capacity of 60 MW; however, due to boiler capacity limitations, the power that the generating units were capable of delivering to the interstate grid was 40 MW. White Pine is an exempt wholesale generator and the Commission had authorized White Pine to sell energy and capacity at wholesale at market-based rates. The White Pine Facility was retired from service in 2015 (Unit No. 2) and 2016 (Unit No. 1) and is no longer generating power in the wholesale market.

Following consummation of the Proposed Transaction, UPPM will no longer be affiliated with White Pine or PM Power Group. Neither UPPM nor any affiliate of UPPM owns or controls any generation facilities, aside from White Pine, or transmission facilities, other than limited facilities used solely for the interconnection of generating facilities to the transmission grid. Neither UPPM nor any affiliates of UPPM own or control any other inputs to electric power production as defined in section 35.36 of FERC's regulations that could be used to prevent competitors from entering any BAA. Further, neither UPPM nor any affiliates of UPPM is a public utility that has a franchised electric service territory or captive customers (as that term is defined under Order No. 697).

LWEC owns and operates a 17.7 MW qualifying small power production facility in L’Anse, Michigan. The wholesale output of the facility is sold into the markets administered by MISO and settled with DTE Electric Company. UPPM and LWEC are parties to an Alternative Electric Supplier Services Agreement dated August 22, 2014 (the 'AES Services Agreement') related primarily to the Certainteed Agreement. Buyer’s prior owner and PM Power Group’s prior owner were affiliated entities and shared certain administrative and management services which Seller continued to perform for LWEC pursuant to a Services Agreement dated August 22, 2014 until its termination effective July 2, 2020 (the 'Services Contract'). The services not taken inhouse are now being provided to LWEC by an independent third-party.

LWEC is a wholly owned direct subsidiary of Convergen Energy LLC, which in turn is a wholly owned direct subsidiary of Convergen Energy Holdings LLC, which in turn is a wholly owned direct subsidiary of First North American Holdings II, Inc. First North American Holdings II, Inc. is owned by Attica Two Limited, which in turn is a wholly owned direct subsidiary of Arabella Group Limited, which in turn is 87.15% owned by Libra Holdings Limited. The remaining 12.85% minority owner of Arabella Group Limited is Thesis Investments S.A. Libra Holdings Limited is owned by the Logothetis family.

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