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Power marketer denies Goldman Sachs Group affiliation

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Power marketer denies Goldman Sachs Group affiliation

Despite allegations by Public Citizen to the contrary, a company that shares part of its name with Goldman Sachs Group Inc. is telling federal regulators that it is unaffiliated with the banking giant.

"Public Citizen ignores the relevant rules and regulations applicable to the [Federal Energy Regulatory Commission's] analysis of whether to grant an applicant market-based rate authorization in favor of criteria irrelevant to the commission's analysis," Goldman Sachs Renewable Power Marketing, or GSRPM, told the agency Jan. 13.

GSRPM in late December 2019 submitted to FERC a request for authority to sell power at market-based rates in which it claimed not to be an affiliate of Goldman Sachs. But in a subsequent protest, Public Citizen told the agency that in addition to having similar names, GSRPM and Goldman Sachs shared employees, offices and phone numbers and provided significant interrelated financial services.

Public Citizen said that since Goldman Sachs is one of the largest investment banks in the world and very active in FERC-jurisdictional markets, GSRPM's claim that it is unaffiliated with Goldman Sachs gives both entities significant regulatory and legal advantages. The group therefore asked FERC to order GSRPM to clarify its relationship with Goldman Sachs.

In a supplemental protest, Public Citizen told FERC that it also had discovered that the three board members — all based in the Cayman Islands — of GSRPM's direct parent, Goldman Sachs Renewable Power LLC, serve as corporate directors for an additional 60 "shell companies," all affiliated with Goldman Sachs. Public Citizen said it also had learned that the three are affiliated "with unusual Cayman Islands-based firms that provide directors-for-hire."

Responding to Public Citizen's protest, GSRPM noted that the group failed to make any assertion that the company does not meet requirements for obtaining market-based rate authority. Moreover, the company said it has been transparent regarding its upstream ownership and affiliations and continued to maintain that it is not an affiliate of Goldman Sachs.

GSRPM said its main mission is to facilitate aggregated sales of power to third parties from multiple projects owned by its parent, "none of which have other touchpoints" to Goldman Sachs, and to engage in certain hedging activity.

Moreover, GSRPM said its petition identified and described the business activities of its upstream owners and affiliates and revealed that Goldman Sachs Renewable Power is managed and controlled by a board consisting of three independent directors.

"Public Citizen has not cited to, and cannot cite to, any rule or regulation of the commission" that GSRPM failed to satisfy, the response asserted. GSRPM said the "disclosures Public Citizen seeks are not required by the commission's regulations for the commission's market power analysis and have no bearing on the analysis."

GSRPM also continued to maintain that it is not affiliated with Goldman Sachs, noting that the banking giant has less than a 5% voting interest in Goldman Sachs Renewable Power, well below the commission's 10% affiliate threshold.

As for the three directors of Goldman Sachs Renewable Power, GSRPM described them as "professional directors." And while each board member sits on the boards of other entities in the investment management and financial services industry, GSRPM said none of those entities have touchpoints to Goldman Sachs other than to Goldman Sachs Renewable Power and the entities listed in the appendix to Public Citizen's supplemental protest.

GSRPM further noted that it disclosed the existence of the three-person independent board in its petition but said it did not name them because it was not required to do so. The filing said their identities are irrelevant to FERC's market power analysis because none of them are owners of either Goldman Sachs Renewable Power or GSRPM. (FERC docket ER20-547)