FERC has approved the sale of Houston-based wholesale gas and power marketer Eagle Energy Partners to EDF Trading North America by bankrupt Lehman Brothers Holdings Inc.

The Federal Energy Regulatory Commission (FERC) found that approval was not required under section 203(a)(2) of the Federal Power Act. The Commission determined that authorization under section 203(a)(2) would not be required for the acquisition of Eagle because a power marketer is not a “transmitting utility,” an “electric utility company,” or a “holding company.”

The deal recently was approved by the judge presiding over Lehman’s bankruptcy (see Daily GPI, Oct. 22). Following Lehman’s bankruptcy in September, the question of what would happen to Eagle produced much speculation (see Daily GPI, Sept. 30; Sept. 23).

FERC determined that the transaction would not have an adverse effect on competition, rates or regulation and thus was “consistent with the public interest.” FERC also determined that the transaction will not result in cross-subsidization or pledge of encumbrance of utility asset for the benefit of an associate company and thus would not harm ratepayers.

Eagle is just the latest enterprise to be targeted by EDF as the international conglomerate seeks bargains in an energy patch rocked by troubles on Wall Street and beset by credit worries. EDF Trading, which is owned 100% by EDF Group, trades in the international wholesale energy markets, buying and selling electricity, emissions, natural gas, coal, freight, biomass and oil, according to the company’s website. EDF Trading is one of the largest electricity traders in Europe, a leading European gas trader and one of the first traders to move into the global market for liquefied natural gas, it says.

The joint application was filed with FERC Oct. 9, by Lehman Brothers Commodity Services Inc., LBMB Fund Eagle Energy Holdings LLC, LBMB Partners Eagle Energy Holdings LLC, LBMB Fund (B) Eagle Energy Holdings LLC, LBMB Capital Partners V Eagle Energy Holdings LLC, Lehman Brothers Holdings Inc., Eagle Energy Partners I LP, Eagle Energy Management LLC, EDF trading North America Management LLC and EDF Trading North America Inc. Under the agreement dated Sept. 26, EDF Trading North America will acquire all of the ownership interests in Eagle.

Lehman Brothers Commodity Services is an indirect subsidiary of Lehman Brothers Holdings. It is authorized by FERC to make wholesale sales of power at market-based rates. Eagle Energy Management is a general partner of Eagle, a buyer and seller of gas and electricity in various wholesale markets. Eagle Energy, a subsidiary of Lehman Brother Commodity Services, is a FERC-authorized power marketer that sells wholesale power, including capacity energy and ancillary services. Eagle represents assets of Lehman Brothers Holdings being sold out of bankruptcy.

EDF Trading is a subsidiary of EDF Holding, which is owned by Electricity de France SA. The transactions will result in EDF Trading North America holding a 98.5% limited partnership interest in Eagle and EDF Trading North America Management holding a 1.5% general partnership interest in Eagle.

Lehman acquired the two-thirds of Eagle that it did not already own in May 2007 (see Daily GPI, May 10, 2007) after it acquired its first third of Eagle in 2006 (see Daily GPI, March 28, 2006). Eagle was formed by former Dynegy executives in 2003 (see Daily GPI, July 2, 2003) and manages and optimizes supply, transportation, transmission, load and storage portfolios on behalf of wholesale natural gas and power clients.

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