Dominion To Sell 33% Partnership Interest In Solar Portfolio To SunEdison

(RTTNews) - Dominion Resources Inc. (D) said that it has agreed to enter into a partnership with SunEdison Inc. (SUNE), in which it would sell 33 percent of its ownership in 425 megawatts of solar generating capacity for approximately $300 million.

As per the terms of the agreement, SunEdison has a future option to buy all or a portion of Dominion's remaining 67 percent ownership.

Included in the agreement are 24 projects in California, Connecticut, Georgia, Indiana, Tennessee and Utah. Fifteen of the projects entered service in 2013 and 2014. The remaining projects either have been completed or have expected in-service dates in 2015. All have long-term power purchase agreements with local electricity providers.

Dominion expects to pay down debt with the cash proceeds. The transaction will require approval by the Federal Energy Regulatory Commission.

Dominion also said that it has agreed to enter into a joint venture with SunEdison to develop the 210-megawatt Three Cedars Solar project in Utah. Dominion and SunEdison each will have a 50 percent interest in Three Cedars.

SunEdison will oversee construction of the projects and day-to-day operation of the facility once it has come online, which is expected in 2016. Dominion will receive the majority of the federal tax benefits from the projects for the first several years, including the investment tax credit.

Three Cedars consists of three sites located in Iron County, Utah. The project has secured 20-year power purchase agreements, interconnection agreements and engineering, procurement and construction contracts.

Separately, SunEdison and J.P. Morgan Asset Management's Infrastructure Investments Group, announced a strategic partnership to fund renewable energy projects in both operating and construction stages, an initial investment of which will be a 33 percent interest in a 425 MW AC portfolio of diverse, domestic solar assets owned by Dominion.

SunEdison and Dominion announced a joint venture for the Three Cedars solar project, a 265 megawatt (MW) DC, or 210 MW AC, solar project in Utah, developed by SunEdison.

As per the terms of the expanded JV, Dominion will invest approximately $320 million to acquire 50 percent of the cash equity and 99 percent of the tax equity in Three Cedars, including funding of construction. SunEdison expects to fully finance the $80 million balance of the capital for Three Cedars through a loan from Deutsche Bank through construction and long-term ownership. Dominion's aggregate investment in the joint venture is approximately $830 million to acquire 50 percent of the cash equity and 99 percent of the tax equity in Four Brothers and Three Cedars, including funding of construction.

SunEdison's 50 percent interest in both the Four Brothers and Three Cedars projects are on the Call Right Projects List for TerraForm Power Inc.