Purchase of three Exelon plants would add to Raven coal holdings

Besides a pending purchase of the mostly coal-fired Brandon Shores, C. P. Crane and H. A. Wagner power plants in Maryland, Raven Power Marketing LLC has other coal affiliations, including two idle coal-fired power plants in North Carolina and an interest in some of coal operator Chris Cline’s coal reserves.

Exelon (NYSE: EXC) said Aug. 9 that it had reached an agreement to sell its three Maryland coal plants to Raven Power Holdings LLC, a new portfolio company of Riverstone Holdings LLC. This deal fulfills Exelon’s commitment to regulators to divest the plants, for regional market power mitigation reasons, as part of its merger with Constellation Energy.

Raven Power Marketing on Aug. 23, under Section 205 of the Federal Power Act and other regulations, asked FERC to: accept for filing Raven Marketing’s FERC Rate Schedule No. 1 to sell power at market-based rates; grant Raven Marketing blanket authority to make market-based sales of energy, capacity and ancillary services under its FERC Rate Schedule No. 1; and grant such waivers and authorizations as have been granted by the commission to other applicants for market-based rate authority, including, but not limited to, waiver of cost-of-service filing requirements.

Raven Power Marketing is a special purpose entity formed for the purpose of owning generating facilities through its subsidiaries, Brandon Shores LLC, C.P. Crane LLC and H.A. Wagner LLC. Raven Power Marketing’s direct and indirect subsidiaries will own these three coal-fired facilities with 2,648 MW of capacity in Maryland, which are currently owned by Constellation Power Source Generation (CPSG).

In addition to this filing, CPSG, Brandon Shores, Wagner and Crane have submitted a joint application under Section 203 of the FPA to obtain commission authorization for CPSG to sell the generating facilities and Brandon Shores, Crane and Wagner to acquire the generating facilities.

Raven Power Marketing is a wholly-owned, direct subsidiary of Raven Power Finance LLC, which is a wholly-owned, direct subsidiary of Raven Power Holdings.

Upon completion of the proposed transaction:

  • Brandon Shores LLC will own a coal-fired facility located in Anne Arundel County, Md. The facility consists of two Babcock and Wilcox coal-fired boilers and two General Electric steam turbines with a total of 1,286 MW of nameplate capacity.
  • H.A. Wagner LLC will own a coal-, natural gas- and oil-fired facility located in Anne Arundel County, Md. The facility consists of two coal-fired units with 459 MW of nameplate capacity, one natural gas-fired (oil backup) unit with 133 MW of nameplate capacity, and one oil-fired unit with 415 MW of nameplate capacity.
  • C.P Crane LLC will own a coal- and oil-fired facility located in Baltimore County, Md. The facility consists of two coal-fired units powered by cyclone steam boilers with 385 MW of nameplate capacity and an oil-fired combustion turbine with 14 MW of nameplate capacity.

Two idle coal plants among other Raven-affiliated assets

Affiliates of Raven control a number of gas- and biomass-fired power plants, and also wind facilities. And they already control two small, coal-fired plants in North Carolina.

  • Elizabethtown Energy LLC owns the Elizabethtown facility, a 35-MW plant fueled primarily by bituminous coal and located in Elizabethtown, N.C. It is an exempt wholesale generator (EWG) with market-based rate authority. Elizabethtown is currently interconnected to Progress Energy Carolinas, but is not committed to any power sales to the Progress transmission system and is currently not operating.
  • Lumberton Energy LLC owns Lumberton, a 35-MW facility fueled primarily by bituminous coal and located in Lumberton, N.C. Lumberton is an EWG with market-based rate authority. Lumberton is currently interconnected to Progress, but is not committed to any power sales to the Progress system and is currently not operating, Raven noted.

Raven Power Marketing is affiliated with entities that own or control potential inputs to electric power production, including coal or other fuels that could be used to generate electricity, intrastate natural gas transportation, storage or distribution facilities, and sites for the potential development of electricity generation.

In the coal area of that investment is: Foresight Reserves LP, which owns or controls through its subsidiaries more than three billion tons of coal reserves in the Illinois and Northern Appalachia basins and which has a strategic relationship with and owns both limited partner and general partner interests in coal landholder Natural Resource Partners LP; Targe Energy LLC, which is based in Pittsburgh, Pa., and operates surface coal and limestone mines in Pennsylvania and reclaims coarse and wet waste coal mines in Pennsylvania and West Virginia; and PVR Partners LP, which owns about 900 million tons of proven coal reserves in Northern and Central Appalachia and the Illinois and San Juan basins. Foresight Reserves is associated with coal operator Chris Cline, who is developing several new mines in Illinois and has two shut mines in West Virginia and Ohio (in Northern Appalachia).

Raven says buy of Maryland plants not a market power issue

In terms of the buy of the three Constellation power plants in Maryland, Raven told FERC the generation facilities being acquired by Brandon Shores, Crane and Wagner are all connected to the Baltimore Gas and Electric transmission system and are located in the market administered by PJM in the Northeast region. Upon the completion of the plant buy, Raven Marketings’ affiliates will own or control 3,303 MW of capacity in PJM. This uncommitted capacity is far less than the 28,774 MW of uncommitted supply in PJM, the company added.

“Therefore, Raven Marketing passes the Pivotal Supplier Analysis for PJM,” Raven said. “In addition, Raven Marketing passes the pivotal supplier analysis for the AP South, 5004/5005 and PJM East markets. The Market Share Analysis shows that Raven Marketing’s affiliates’ market share in the PJM market ranges from 4.8 to 5.8% during the winter, spring, summer and fall seasons. Raven Marketing’s affiliates have their highest market share in each of the AP South, 5004/5005 and PJM East markets during the summer season when the market shares are 14.0%, 18.5%, and 4.9%, respectively. Given that the seasonal market share in all of these markets never exceeds the 20% threshold, Raven Marketing passes the market share analysis for the PJM, AP South, 5004/5005 and PJM East markets.”

In determining transmission market power, the commission requires that a public utility with market-based rates, or any of its affiliates, that owns, operates, or controls transmission facilities have a commission-approved open access transmission tariff (OATT) on file before granting such seller market-based rate authorization. “Raven Marketing and its affiliates do not themselves own, operate, or control any transmission facilities (except interconnection facilities) in the relevant market or first tier balancing authority areas,” the company wrote. “Accordingly, Raven Marketing cannot exercise transmission market power.”

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.