DTE acquiring interests in two cogen plants from Duke, SUEZ

A unit of DTE Energy (NYSE: DTE) applied July 20 at FERC for authorization under Section 203 of the Federal Power Act to buy interests in two cogeneration power plants in Minnesota and Illinois.

DTE Energy Services (DTEES) wants to acquire the respective ownership interests of Duke Energy Generation Services Holding Co. Inc. (DEGS Holdco) and SUEZ Energy Solutions Inc. in St. Paul Cogeneration LLC (SP Cogen) and SUEZ-DEGS of Tuscola LLC. The acquiring entity will be either DTEES and/or one or more wholly owned subsidiaries of DTEES that will be formed for the purpose of engaging in the transaction.

SP Cogen owns a 37-MW qualifying cogeneration facility located in St. Paul, Minn., within the balancing authority area of the Midwest Independent Transmission System Operator Inc. (MISO). Fifty percent of the ownership interests in SP Cogen are owned by DEGS of St. Paul LLC, which is a wholly owned direct subsidiary of DEGS Holdco, which is an indirect wholly owned subsidiary of Duke Energy (NYSE: DUK). The commission has authorized SP Cogen to make wholesale sales of electric energy and power at market-based rates. SP Cogen has two customers. All of the electrical output from the facility is sold to Northern States Power Co. under a 20-year contract expiring in 2022. The thermal energy from SP Cogen is sold to District Heating Development Co.

The SP Cogen facility is operated by Ever-Green Energy LLC (EGE), which holds the remaining 50% voting interest in SP Cogen. EGE is owned by District Energy St. Paul Inc. and District Cooling St. Paul Inc. EGE’s interests in SP Cogen will not change as a consequence of the transaction.

Tuscola operates and maintains Tuscola Cogen, an 18-MW nameplate qualifying cogeneration facility in Tuscola, Ill., in the MISO balancing authority area, pursuant to a 20-year Energy, Water and Wastewater Services Agreement (EWWSA) with Equistar Chemicals. Under the EWWSA, Tuscola provides Equistar with electricity services up to the Energy Contract Capacity of 9 MW, along with other services, such as steam-water processing, demineralized water, compressed air, and water and waste-water treatment services at Equistar’s chemical manufacturing plant. Tuscola may also provide electric energy beyond the Energy Contract Capacity upon request and if it is available. The equity interests in Tuscola are directly held 51% by SUEZ and 49% by DEGS Holdco.

The filing doesn’t give the fuels for each plant. The GenerationHub database shows St. Paul Cogen as fired by wood, with the Tuscola facility fired by coal.

A brochure on the SUEZ website confirms that the Tuscola fuel is coal. “The Tuscola facility provides a long-term reliable energy source for the largest producer of ethylene, propylene and polyethylene in the nation,” said the brochure. “The facility supplies both electricity and steam to the chemical company while increasing efficiency, lowering costs and reducing emissions into the atmosphere.”

The Ever-Green Energy website confirms wood as the fuel for the St. Paul facility. “In the 1990s, Ever-Green Energy’s management team saw the potential to efficiently produce clean electricity,” said the website. “The team conceived a way to obtain a 20-year Power Purchase Agreement for the sale of electricity generated through a renewable fueled, combined heat and power (CHP) plant. This agreement, along with a partnership with Duke Energy Generation Services, contributed to the successful development of a new wood-fired CHP facility in downtown Saint Paul, which began commercial operation in 2003. The CHP plant is jointly owned by Ever-Green Energy and Duke Energy Generation Services under the name St. Paul Cogeneration.”

The transaction involving these two plants is part of a larger transaction in which DTEES will also acquire interests indirectly held by these sellers in certain other facilities. To the extent the other facilities are involved in the sale or production of electricity, they do not make sales of electricity at wholesale or transmit electricity in interstate commerce, the application said. Specifically, the other facilities are: DEGS of Boca Raton LLC; DEGS of Cincinnati LLC; Delta Township Utilities II LLC; Environmental Wood Supply LLC; DEGS of Philadelphia LLC; DEGS of San Diego Inc.; DEGS of St. Bernard LLC; SUEZ-DEGS of Ashtabula LLC; Energy Equipment Leasing LLC; SUEZ-DEGS of Silver Grove LLC; SUEZ-DEGS of Rochester LLC; Delta Township Utilities LLC; SUEZ-DEGS of Lansing LLC; and SUEZ/VWNA/DES of Lansing LLC.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.