Start-up Retail Supplier LVI Power to Acquire Mid-Atlantic Retail Provider

Start-up retail supplier LVI Power, LLC has entered into a transaction to acquire Castlebridge Energy Group, LLC, according to an application filed at FERC.

Castlebridge Energy Group, LLC (CEG) sought FERC authorization for the proposed transaction in which LVI Power, LLC (LVI) would acquire 100% of CEG's outstanding membership interests, thereby transferring control over CEG and its assets subject to the jurisdiction of the Commission to LVI

Such assets include CEG's authorization to make sales of electric power, energy and ancillary services at wholesale pursuant to FPA Section 205 as well as certain wholesale electric contracts entered into pursuant to that market-based rate authorization.

In October, Washington Gas Energy Services announced that it had acquired "all" of Castlebridge Energy Group's retail customers (click here for story), and Castlebridge did not indicate in the new FERC application that it was currently serving any customers at retail.

Additionally, FERC recently granted Castlebridge Energy Group's request for authorization for sale of CEG's membership interests to Gulf Oil Company, but Castlebridge said that CEG and Gulf Oil did not consummate that transaction, and CEG since has determined to sell its membership interests to LVI.

CEG's voting membership interests are held by three individuals: Mark S. Schroeder (33.3%), H. Bertram Wilson (33.3%), and Kevin S. Kahoe (33.3%). A fourth individual, Andy Lecce, holds a 10%, non-voting membership interest in CEG. CEG holds retail electric and natural gas supplier licenses in Maryland, and retail electric supplier licenses in Pennsylvania and the District of Columbia.

LVI is owned by two individuals, Eliot H. Powell and Jerome R. Sanders, each owning a 50% share in LVI. LVI's primary business activity consists of retail electric supplier operations in Maryland and Pennsylvania.

Castlebridge said that the proposed transaction is valued at less than $10 million and involves the transfer of ownership of the membership interests in CEG, whose only jurisdictional assets are its FPA Section 205 market based rate authorization and any wholesale electric contracts in existence as of the closing of the proposed transaction.

CEG operations are confined to the footprint of PJM Interconnection LLC (PJM), and, in 2013, CEG's sales in the PJM market through October 31, 2013 were 200,844 MWh.

LVI is a small, startup electricity supplier focused on retail markets. Like CEG, LVI's operations are limited to the PJM footprint. LVI is a new entrant into the PJM market, having become a member in the spring of 2013. For 2013, LVI's sales in the PJM market were approximately 417 MWh, with total sales revenues of approximately $34,700.

LVI also owns 100% of LVI Power Marketing LLC (LVI-PM) and, through LVI-PM, LVI owns 100% of LVI-NJ, LLC (LVI-NJ), each a Delaware limited liability company. LVI-PM and LVI-NJ have been formed in anticipation of providing marketing services to energy brokers and agents upon LVI's approval as an energy supplier in various states within the PJM footprint. Neither LVI-PM nor LVI-NJ have any current, active operations.

Docket EC14-40