Orrick lawyers have served as bond counsel in connection with many financings involving the conversion of biosolids to fertilizer, natural gas, synfuel and direct energy. Recent transactions include:
- A $62.4 million privately placed bond issue for Microgy Holdings Inc., a subsidiary of publicly held Environmental Power Corp., to construct two modular units to process waste dairy manure into pipeline-grade natural gas to be sold to Pacific Gas and Electric Company
- A $161 million privately placed bond issue for EnerTech Environmental Inc. to construct a biosolids processing facility in Rialto, California (East of Los Angeles), which serves public wastewater treatment plants in the Southern California area. This project produces a marketable fuel product. (2006)
- A $20 million publicly offered bond issue for an affiliate of Synagro Technologies Inc. to construct a biosolids processing facility adjacent to the Sacramento Regional Wastewater Treatment Plant. (2000)
- Proposed financing for EarthRenew Inc., a Canadian company, to construct modular units in California’s Central Valley to process cattle manure and other biological waste materials into soil additive/fertilizer.
Landfill and Landfill Gas
In the last decade, Orrick has worked on the financings of landfill development projects with all three major national waste companies: Waste Management, Allied Waste and Republic Services. We have also worked with large regional companies such as Burrtec Waste Group in Southern California and Norcal Waste Systems in Northern California. Recent transactions include:
- A $20 million issuance of Clean Renewable Energy Bonds (CREBs) for the Los Angeles County Sanitation Districts to finance landfill gas collection and processing equipment and energy production facilities using landfill gas at various sites for the districts. CREBs are a new financing tool created in the Internal Revenue Code, and this was one of the first and largest financings of this type in the United States.
- Numerous financings for Waste Management Inc., Republic Services Inc. and smaller regional waste disposal companies to finance landfill cell development costs and landfill gas collection and processing equipment.
- Proposed financing for BioFuels LLC, based in San Diego, California, to acquire and install facilities to process landfill gas and gases generated at sewage treatment plants into commercially usable natural gas to be sold to local customers for energy production or use in fuel cells. Each module is about $15 million.
Waste to Energy
Orrick’s experience in solid waste facilities financing spans the entire gamut of the industry, including collection and transfer vehicles, recycling and transfer facilities, landfills, treatment facilities, agricultural waste digesters, and waste-to-energy plants. Financing structures for these deals include corporate balance sheet, project financing and credit enhancement techniques.
More recently, projects have involved turning municipal waste to energy. While the types of projects mentioned previously continue to be developed and existing facilities are expanded, the emphasis is now on new technology such as the proposed financing for Fulcrum Energy in northern Nevada to dispose of municipal waste in a plasma-arc incineration unit.
- Negotiating for the sale by a California municipal utility of an approximately $195 million wind facility to private equity and the subsequent prepayment by the municipal utility for the purchase of power from the facility.
- Serving as project counsel and bond counsel on a $385 million financing for purchase of a 125-megawatt wind project in southwestern Washington by a California municipal utility. This was a restructuring of a planned public/private project that involved private tax equity investors, prepayment for output with tax-exempt bond proceeds, and an option to purchase on the part of the municipal utility following the earn-out period on the federal tax benefits, including production tax credits and accelerated depreciation. Tax equity was no longer available after the financial collapse in the fall of 2008, which led to the restructuring.
- Acting as bond counsel and special counsel in connection with a 100-megawatt wind project in southwestern Washington being undertaken by two municipal utilities and two co-ops, which will be funded through a combination of a federal grant in lieu of investment tax credit under the 2009 federal stimulus bill and a prepayment for energy from tax-exempt bond proceeds.
- Serving as special counsel to a municipal utility off-taker in connection with multiple phases of a 100-megawatt wind power project in south-central Washington.
- The program to sell to public school districts and install/maintain photovoltaic solar facilities Serving as counsel to a large international airport in connection with a photovoltaic solar project installed on top of terminal buildings
- The $20 million issuance of Clean Renewable Energy Bonds on behalf of California’s Department of Transportation for the acquisition and installation of solar panels and associated equipment, at various sites of the department
- The $35.61 million financing by the Northern California Power Agency in connection with the Geysers-Calistoga Geothermal Resource Area in Sonoma and Lake Counties, California. In addition to the geothermal leasehold, wells and gathering system, the project consists of two operating electric-generating stations, a heat dissipation system, a steam gathering system and other related facilities.
- Serving as bond counsel to a large municipal joint powers agency in connection with the construction of a large geothermal power project in California, including the subsequent addition of brown water reinjection facilities.