Westwood seeks FERC approval of upstream ownership change

Westwood Generation LLC, which operates a small coal-fired power plant in Pennsylvania, on Jan. 22 requested prior authorization from the Federal Energy Regulatory Commission for the disposition of jurisdictional facilities that will result from the transfer of a 25% indirect membership interest in Westwood.

That interest would be transferred from Olympus Westwood Funding LLC (OWF), a wholly-owned indirect subsidiary of Olympus Power LLC (Olympus), to Treemont Funding LLC (Treemont), a wholly-owned indirect subsidiary of ArcLight Energy Partners Fund IV LP (ArcLight Fund IV).  As a result of the proposed transaction, Westwood will be indirectly owned by Olympus (75%) and ArcLight Fund IV (25%).

Westwood told FERC that the transaction involves only a partial transfer of the upstream equity interests in applicant and the underlying jurisdictional assets discussed in this application, and involves a value of less than $10m (in fact, approximately $1.3m). Nevertheless, out of an abundance of caution, Westwood is seeking this approval from FERC. The parties intend to close the transaction as soon as possible after obtaining commission authorization.

Westwood (formerly known as WPS Westwood Generation LLC) owns and operates a 30-MW, coal-fired, fluidized-bed combustion facility located in Tremont, Pa. The facility is interconnected to the transmission system operated by PJM Interconnection. Westwood does not own, operate, or control any transmission facilities, aside from those limited interconnection facilities necessary to connect the facility to the grid. Westwood is an exempt wholesale generator (EWG) under the Public Utility Holding Company Act of 2005. Westwood is authorized by the commission to sell energy, capacity, and ancillary services at market-based rates. Westwood also has a rate schedule for reactive supply and voltage control from generation resources on file with the commission.

Olympus is a privately owned independent power company that owns and operates power projects, and provides operating and maintenance services to its own projects and to third parties. Olympus owns indirect interests in a number of generating facilities, including in Westwood’s relevant market – the PJM balancing authority area (BAA). In addition to the Westwood facility, Olympus is affiliated with the following entities that own or control generation in the PJM BAA:

  • York Haven Power Co. LLC, the owner of a 19.6-MW hydroelectric project on the Susquehanna River in Harrisburg, Pa. The York Haven hydro project is a qualifying facility (QF) under the Public Utility Regulatory Policies Act of 1978, as amended (PURPA).
  • Panther Creek Power Operating LLC, the lessee and jurisdictional operator of a 94 MW (nameplate) QF located in Nesquehoning, Pa.

FERC on Oct. 25, 2012, approved the sale by Sunbury Holdings LLC of this 30-MW, coal-fired plant. On Sept. 26, WPS Westwood Generation and Sunbury Holdings filed an application under section 203(a)(1)(A) of the Federal Power Act requesting commission authorization for the sale by Sunbury, an indirect subsidiary of Integrys Energy Group (NYSE: TEG), of all of its interests in Westwood to Olympus Westwood Holdings LLC, a newly formed indirect subsidiary of Olympus 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.