The Work

December 7, 2011 5:51 PM

Gibson Dunn, Skadden Advise as MidAmerican Energy Enters Solar Market

Posted by Tom Huddleston Jr.

MidAmerican Energy Holdings is betting on sunny days ahead.

The utility arm of Warren Buffett's investment company Berkshire Hathaway announced Wednesday that it is moving into the solar energy market by acquiring the Topaz Solar Farm from Tempe, Arizona–based First Solar.

Construction on the 550-megawatt Topaz facility, which is located in San Luis Obispo County, California, began last month and is expected to be completed by early 2015. The plant will eventually be able to generate enough energy to power nearly 160,000 households, according to MidAmerican's announcement. Financial terms of the transaction were not released, but the MidAmerican announcement puts the cost of the Topaz project at $2 billion.

Des Moines, Iowa–based MidAmerican is already one of the country's leading operators of wind power facilities, and Chairman Greg Abel said in the company's announcement that buying the Topaz plant will expand MidAmerican's "renewable energy footprint" to benefit both customers and the environment.

MidAmerican turned to Gibson, Dunn & Crutcher as outside counsel on the transaction. The firm's team on the matter is being led by New York–based corporate partner Peter Hanlon. Assisting Hanlon are energy and infrastructure partners Nicholas Politan and William Campbell, along with real estate partner Amy Forbes, environmental partner Thomas McHenry, and tax partner David Sinak. Partner William Hollaway is advising on Federal Energy Regulatory Commission matters.

Hanlon, who joined Gibson, Dunn from Willkie Farr & Gallagher in January, advised Berkshire on its 1999 acquisition of MidAmerican while he was at Willkie. He has served as the company's regular deal counsel ever since, advising on such transactions as MidAmerican's 2005 purchase of PacifiCorp for $9.4 billion.

MidAmerican's general counsel is Douglas Anderson.

Skadden, Arps, Slate, Meagher & Flom and San Francisco–based Farella Braun + Martel are advising First Solar on the transaction. Skadden's team includes Washington, D.C., based energy and infrastructure projects partners Martin Klepper and Lance Brasher. Thomas Logan and Frank Shaw, both energy and infrastructure projects counsel, are also advising.

This deal is the latest in a series of transactional assignments Klepper and Brasher have undertaken for First Solar. Skadden advised the company on a $1.46 billion partially guaranteed Energy Department loan to support the Desert Sunlight solar farm project in Riverside, California, and also worked on a $646 million loan from the Energy Department to support the construction of the Antelope Valley Solar Ranch.

(In October, First Solar sold the Desert Sunlight plant to GE Energy Financial Services and NextEra Energy Resources and the Antelope Valley facility to Exelon Corporation.)

Environmental partner Paul "Skip" Spaulding and real estate partner Richard Rabbitt are handling the matter for Farella Braun. Environmental partners Jon Benjamin and David Lazerwitz, along with land use special counsel Ilene Dick, are also working on the transaction. Farella Braun previously advised First Solar in securing various permits, environmental approvals, and real estate rights required for government approval of the Topaz project, according to the firm.

First Solar's general counsel is Mary Beth Gustafsson.

Reuters notes that Buffett and Berkshire vice-chairman and Munger, Tolles & Olson founding partner Charles Munger— have championed solar power in recent years. In 2008, Buffett bought a 10 percent stake in Chinese electric car company BYD, which also has a growing solar panel unit, for $230 million.

According to Reuters, First Solar had hoped to win a federal loan guarantee to help finance the Topaz plant as it had three other solar projects. Those hopes were dashed, Reuters reports, when the collapse of solar panel manufacturer Solyndra "prompted fresh scrutiny of the loan guarantee application process, and First Solar's Topaz project was not able to meet the September program deadline."

Solyndra, which received a $535 million federal loan guarantee, filed for bankruptcy in September in a flameout that has generated plenty of work for lawyers.

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