Ownership changes at the parent-company level do not constitute a transfer of “direct ownership interests” in distant subsidiaries, a unanimous panel of the 8th Circuit held last month in Laredo Ridge Wind LLC, et al v. Nebraska Public Power District, No. 20-1956, 2021 WL 3731897 (8th Cir. Aug. 24, 2021). The Nebraska Public Power District (NPPD), a public utility company, sued four affiliated wind farm businesses for breach of Power Purchase Agreements (the PPAs) after the wind farms’ parent companies changed hands multiple times. The district court granted summary judgment in favor of the wind farms and a preliminary injunction preventing NPPD from terminating the PPAs, and the 8th Circuit affirmed.
From 2008 to 2010, NPPD signed identical PPAs with four limited liability companies (the Project Entities) that own and operate wind energy-generation facilities in rural Nebraska, each originally developed by Edison Mission Energy (Edison). Under the PPAs, NPPD agreed to buy all energy produced by the Project Entities for 20 years at a predetermined price. The Project Entities have no employees, and each is part of a multi-tier affiliate ownership structure with Edison at the top, the Project Entities at the bottom, and many layers of subsidiary holding companies in between. This tiered structure allows parent companies to allocate federal tax credits and is “largely a function of the syndication of multiple wind energy projects.” Brief of Appellees at 3, Laredo Ridge Wind LLC, et. al. v. Nebraska Public Power District, No. 20-1956 (8th Cir. Aug. 6, 2020). Continue Reading