FERC signs off on sale of Georgia gas plant to ArcLight affiliate

A Federal Energy Regulatory Commission official sent a Dec. 6 letter to various ArcLight Capital Partners LLC affiliate companies acknowledging their Sept. 17 notice that Southeast PowerGen LLC has acquired Mid-Georgia Cogen LP, which owns a 323 MW generation facility in Georgia.

“You state that the ArcLight Companies are now all affiliated with Mid-Georgia Cogen,” said the letter from Steve Rodgers, Director of FERC’s Division of Electric Power Regulation-West. “You further state that all of the output from the Mid-Georgia Cogen facility is fully committed to a third party under a long-term sales contract. You represent that this new affiliation does not affect the conditions the Commission relied upon when granting the ArcLight Companies market-based rate authority.” Rodgers noted that this transaction raised no objections from outside parties.

The ArcLight companies are ArcLight Energy Marketing LLC (AEM), AL Sandersville LLC, Effingham County Power LLC, MPC Generating LLC, Walton County Power LLC and Washington County Power LLC.

According to the Sept. 17 filing by these companies:

  • AEM operates as a marketer of electric power and natural gas. The commission has authorized AEM to sell energy, capacity, and ancillary services at market-based rates. AEM is a wholly-owned subsidiary of ArcLight Energy Markets LLC, which is a wholly-owned subsidiary of ArcLight Liquid Energy Opportunities Fund LP.
  • AL Sandersville owns and operates an approximately 692 MW (nameplate) natural gas-fired facility located in Washington County, Ga. The Sandersville facility is interconnected to the transmission system owned by Georgia Power (GPC) and is located in the Southern Company Services (SOCO) balancing authority area (BAA). AL Sandersville is a wholly-owned indirect subsidiary of Southeast PowerGen LLC (SEPG).
  • Effingham leases and operates an approximately 597 MW (nameplate) combined cycle, natural gas facility in Rincon, Ga. The Effingham facility is interconnected to the transmission system owned by GPC and located in the SOCO BAA. Effingham leases the facility (including interconnection facilities necessary to interconnect the Effingham facility to the transmission grid) from the Effingham County Industrial Authority under a long-term lease agreement dated Dec. 1, 2001. The lease agreement extends through Dec. 1, 2016. The output of the Effingham facility is subject to a long-term tolling agreement with Constellation Energy Commodities Group (Constellation) through Dec. 31, 2015, under which Constellation has exclusive rights to the facility’s capacity and first-call rights to schedule and utilize energy associated with that capacity. Effingham is a wholly-owned indirect subsidiary of SEPG.
  • MPC Generating owns and operates an approximately 386 MW (nameplate) simple cycle, natural gas-fired facility in Monroe County, Ga. The MPC facility is interconnected to the transmission system owned by GPC and is located in the SOCO BAA. The output of the MPC facility is subject to a long-term tolling agreement with GPC through May 31, 2024. Under this agreement, GPC has exclusive rights to the capacity and first-call rights to schedule and utilize energy associated with that capacity. MPC Generating is a wholly-owned indirect subsidiary of SEPG.
  • Walton owns and operates an approximately 494 MW (nameplate) simple cycle, natural-gas fired generating facility located in Monroe, Ga. The Walton facility is interconnected to the transmission system owned by GPC and is located in the SOCO BAA. The output of the Walton facility is subject to a long-term tolling agreement with GPC that extends through May 31, 2024. Under this agreement, GPC has exclusive rights to the capacity and first-call rights to schedule and utilize energy associated with that capacity. Walton is a wholly-owned indirect subsidiary of SEPG.
  • Washington leases and operates an approximately 796 MW (nameplate) simple cycle, natural-gas fired plant located in Linton, Ga. The Washington facility is interconnected to the transmission system owned by GPC and is located in the SOCO BAA. Washington leases the Washington facility (including interconnection facilities necessary to interconnection the Washington facility to the transmission grid) from the Development Authority of Washington County under a long-term lease agreement dated May 1, 2001. The lease agreement extends through Dec. 30, 2016. The output of the Washington facility is subject to separate long-term tolling agreements with Constellation and GPC that extend through Dec. 31, 2015, and May 31, 2024, respectively. Washington is a wholly-owned indirect subsidiary of SEPG.

Mid-Georgia plant was bought from Perennial Power Holdings

“Sellers are filing this Notice to report their new affiliation with Mid-Georgia,” said the Sept. 17 filing. “Specifically, on August 16, 2012, SEPG indirectly acquired 100% of the ownership interests in Mid-Georgia from Perennial Power Holdings, Inc. As a result, Mid-Georgia currently is a wholly-owned indirect subsidiary of SEPG…. Mid-Georgia owns the Mid-Georgia Facility, a 323 MW (nameplate) electric generation facility that is interconnected to the transmission system owned by GPC and located in the SOCO BAA. The Mid-Georgia Facility is a qualifying facility (QF) under the Public Utility Regulatory Policies Act of 1978, as amended (PURPA). All of the output from the Mid-Georgia Facility is sold to GPC under a long-term tolling agreement.”

The filing added that the sellers’ new affiliation with Mid-Georgia does not raise any horizontal market power concerns, because the output of the Mid-Georgia Facility is fully committed to GPC under a long-term tolling agreement. However, even if the output of the Mid-Georgia Facility were uncommitted, the additional 323 MW of affiliated generation does not significantly alter sellers’ market position in the SOCO BAA, the filing added.

Southern Company Services and Georgia Power are both subsidiaries of Southern Co. (NYSE: SO).

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.