FERC approves ownership change for Palouse wind farm

An official at the Federal Energy Regulatory Commission on Nov. 26 approved a notice from Palouse Wind LLC related to a change of ownership for the recently-started Palouse wind power project in Washington state.

On Oct. 19, Palouse Wind filed an application under section 203 (a)(1)(A) of the Federal Power Act (FPA) requesting commission authorization for the disposition of jurisdictional facilities resulting from the: acquisition by Cook Inlet Region Inc. or one of its affiliates (Cook Inlet) of all of the passive, non-controlling Class B membership interests in Palouse Wind Holdings LLC; and First Wind Palouse Portfolio LLC or an affiliate thereof (seller) exchanging or converting seller’s membership interests in Palouse Holdings to Class A membership interests in Palouse Holdings.

The jurisdictional facilities consist of Palouse’s market-based rate schedule, wholesale power sales agreement, interconnection facilities, and related books and records. Palouse owns and operates a 105.27-MW nameplate wind-powered generation facility located in Whitman County, Wash. The facility is interconnected to the transmission system owned and operated by Avista Corp. and began producing test power in September 2012. The entire output of the facility is sold to Avista under a long-term power purchase agreement. Palouse Wind is an exempt wholesale generator (EWG) and is authorized to sell electric energy and capacity at market-based rates.

Palouse Wind is a wholly-owned, direct subsidiary of Palouse Holdings, which is a wholly-owned, indirect subsidiary of seller and First Wind Holdings LLC (First Wind Holdings). First Wind Holdings is an independent North American wind energy company focused on the development, ownership, and operation of wind energy generating projects. D.E. Shaw MWP Acquisition Holdings LLC (D.E. Shaw) and Madison Dearborn Capital Partners IV LP (Madison Dearborn) each own approximately 46% of the voting interests in First Wind Holdings.

Cook Inlet is an Alaska Native corporation based in Anchorage. Cook Inlet is south-central Alaska’s largest private landowner and has 1.3 million acres of subsurface estate available for gas, oil, mineral, and alternative development. Palouse Wind stated that neither Cook Inlet nor its affiliates own or control a 10% or greater voting interest in entities that have market-based rate authority, or that own or control electric generation, transmission, or distribution facilities located within the United States.

Fire Island Wind LLC (Fire Island), a wholly-owned Cook Inlet subsidiary, is developing Alaska’s largest wind energy project on Cook Inlet land on Fire Island, near Anchorage. The Fire Island facility’s output is fully committed to Chugach Electric Association under a power purchase agreement approved by the Regulatory Commission of Alaska. The Fire Island Facility became operational at the end of September 2012 and is an EWG. Palouse Wind stated that when completed and commissioned, the eleven-turbine wind farm will produce up to 17.6 MW of power and supply more than 51,000 MW hours of electricity annually to meet the needs of more than 6,000 Southcentral Alaska households. Fire Island is not subject to commission jurisdiction as a public utility under the FPA.

Pursuant to a Membership Interest Purchase Agreement between seller and Cook Inlet the following will occur to consummate the transaction:

  • seller will sell and Cook Inlet will acquire 100% of the passive, non-controlling Class B membership interests in Palouse Holdings; and
  • seller will exchange or convert its existing membership interest in Palouse Holdings for 100% of the Class A membership in Palouse Holdings.

The Nov. 26 approval was from Steve Rodgers, FERC’s Director of the Division of Electric Power Regulation–West.

Said the Cook Inlet website about the Fire Island project: “Fire Island Wind LLC has constructed a commercial-scale wind farm on Fire Island, three miles west of Anchorage. Southcentral Alaska uses natural gas to generate more than 90 percent of its electricity. Clean, renewable wind energy could diversify Railbelt power resources, which would increase reliability and decrease ratepayers’ vulnerability to gas shortages and price increases. CIRI and Chugach Electric Association (CEA) have agreed to Fire Island wind power purchase terms that have allowed CIRI to proceed with construction of the first phase of the Fire Island wind project. The first 11-turbine project phase will have a 17.6 megawatt (MW) generation capacity and is expected to supply more than 50,000 MW-hours of power to CEA annually, enough power for approximately 4,000 Southcentral Alaska homes. The project will offset approximately 0.5 billion cubic feet (bcf) of CEA natural gas consumption for power generation, supplying about 4 percent of CEA’s load. The Fire Island Wind project is constructed and project commissioning and commercial power production are anticipated in fall 2012.”

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.