As gas prices rise and electricity prices rise, more and more companies are turning to toll agreements to finance and share the risk of building new commercial power plants, Dealmaker says. Roger D. Feldman, a partner and co-chair of Bingham`s financing and development group Dana LLP, told Power-Gen International on Wednesday that the basic model appears to be that energy companies, capable of managing both fuel and electricity risk, take over such projects. Non-corporate interests or assets by any means. Although the toll agreements in question are becoming more common in the energy sector, parties who have or may have an interest in acquiring the other party must be careful not to acquire the economic ownership of the offeree company before fulfilling the reporting obligations under the HSR Act if notification of the HSR was necessary. Otherwise, the toll agreement can be interpreted as proof of shooting and the acquiring person is liable to significant penalties of up to 40,654 $US per day for non-compliance. ORLANDO-As gas prices rise and electricity prices rise, more and more companies are turning to toll agreements to finance and share the risk of building new commercial power plants, Dealmaker says. A toll contract is a contract for the lease of a power plant by its owners. These agreements give the tenant the opportunity to convert one physical product (fuel) into another (electricity). This chapter explains how to determine the economic value of a power plant. Capital Power Corp.
has extended the toll deal for the Decatur Energy Center by 10 years until December 2032, the company said Aug. 4. According to the DOJ, agreements that transfer economic ownership and are executed before the notification of the RSH and the expiration of the waiting period can, under the HSR Act, be assimilated to a jump of arms if they are concluded while a buyer intends to acquire the destination.  This type of agreement allows a buyer to take control of an objective and obtain effects of the concentration before the regulatory authorities have completed their anti-dominant examination. The DOJ therefore argued that the term sheet and the combined toll agreement had removed Calpine as an independent competitive presence in the market and that Duke could make all competitive decisions for the Osprey facility from the date of entry into force of the toll agreement and well before RSH`s application was filed. In August 2014, Duke Energy Corporation (Duke) and Calpine Corporation (Calpine Corporation), a competing wholesale electricity vendor in Florida, agreed to purchase the Osprey Energy Center (Osprey), a combined natural gas and gas power plant in Florida, in Calpine. The structure of the proposed transaction included a toll agreement that gave Duke responsibility for determining the amount of electricity to be generated at Osprey and purchasing the fuel needed to generate that electricity. In essence, the toll agreement allowed Duke to take operational control of the Osprey facility and limited Calpine`s role to the “mechanical operation of the Osprey facility, in accordance with Duke`s instructions.”  As part of the extension of the toll agreement, Decatur is now receiving payments for an additional capacity of 34 MW. The facility will also receive capacity payments if an updated interconnection agreement of an additional 79 MW is concluded in 2021.