Billionaire Bacon stands to profit from Xcel transmission lines he bitterly opposes
Saturday, March 05, 2011 at 5:53 pm
Hedge fund billionaire Louis Bacon, who has been battling Xcel Energy in its bid to run new transmission lines across his massive Trinchera Ranch in the San Luis Valley in southern Colorado, apparently wins even if he loses.The Denver Post Friday reported Bacon’s hedge fund, Moore Capital Management, owns nearly $56 million in Xcel stock and stands to profit from the power lines that will connect the sun-soaked San Luis Valley and its many solar power facilities to Colorado’s Front Range cities.
The website Real Aspen, in an email interview with Bacon Friday, reported Minnesota-based Xcel – Colorado’s largest utility – is so lucrative that it has become his hedge fund’s largest utility holding.
“I am expecting their guaranteed profit earnings machine will pay for my legal fees irrespective of the success of their [San Luis] Valley project,” Bacon wrote in an e-mail to Real Aspen Friday to explain Moore Capital’s purchase of 2,335,000 shares of Xcel in the fourth quarter of 2010 . “They are in a no-lose position in most states — if this is what the regulatory structure is why not benefit from it?”
More from Real Aspen:
“Despite his hedge fund’s financial stake in Xcel, the owner of the 171,400-acre Trinchera Ranch, which Bacon bought from Steve Forbes for $175 million in 2007, isn’t done fighting Xcel. Bacon’s land sits alongside Blanca Peak, the state’s third-highest mountain, and he wants to keep the region pristine.
“Bacon, a strong skier who regularly visits Aspen, is using his investor know-how to expose Xcel’s greed, which he says is buoyed by the Colorado Public Utilities Commission’s lax regulatory oversight.
“Xcel maintains new power lines are needed to re-enforce the reliability of the existing power grid in the San Luis Valley. The utility originally dressed the proposal in green, asserting the lines would transport solar energy from sun-drenched southern Colorado to the bustling Front Range. Xcel has since backed off its headier environmental claims and no longer has to use the new lines for cleaner forms of energy.
“Bacon and other residents in the area are calling for more transparency in Colorado’s utility regulatory decision-making and they have proposed alternative routes for the location of any new power lines.”