Having challenged a termination notice on February 12 from Hawaiian Electric Co. (HECO) detailing that the utility will be canceling its power purchase agreements (PPAs) for three solar projects being developed in Hawaii,
SunEdison is exploring other options for the 148 MW of PV awaiting completion.
HECO blamed SunEdisons "apparently precarious financial condition" as the reason for the PPA cancelation in last weeks filing, which concerns three solar projects currently being developed by the solar firm: the 65 MW Kawailoa solar farm; the 64 MW Waipio plant, and the 19 MW Milani II project.
SunEdison had intended to transfer these solar projects to its yieldco DE Shaw group, but the rhetoric of HECOs filing suggests a total lack of confidence in this plan. "SunEdison could not guarantee that DE Shaw would in fact complete the purchase of the projects," read the filing.
SunEdison has duly sought to fight this cancellation, but analysts have remarked that it is another legal fight that the company could simply do without right now. If these PPAs are lost, then additional plans to transfer future solar assets to DE Shaw and other investors could also unravel, Credit Suisse analyst Patrick Jobin told Bloomberg.
The three solar projects are on course for completion by the end of 2016, and a total of $42 million has already been invested in their development, SunEdison said. The company filed a letter to the Hawaii Public Utilities Commission (PUC) this week challenging HECOs actions, and will file an official response to the PPA termination notice by February 23.
Towards the end of 2015, SunEdison sought to reshuffle its asset base by transferring some solar projects already under development to DE Shaw and other partners of its TerraForm Power yieldco unit, including Northwestern University and Dearborn Partners LLC. This 1 GW asset transfer included the 148 MW Hawaiian projects, and led to the nullification of around $336 million of debt on SunEdisons books.
Earlier this month, however, a judge in the U.S. ruled that certain assets could no longer be transferred until a hearing on February 25.