FERC approves transfer of the Arapahoe gas plant in Colorado

The Federal Energy Regulatory Commission on June 4 approved the disposition of jurisdictional facilities related to the transfer of a gas-fired power plant in Colorado from one subsidiary of a parent company to another.

On April 26, SWG Colorado LLC and SWG Arapahoe LLC requested commission authorization for the disposition of jurisdictional facilities resulting from an internal reorganization that includes the transfer of 100% of SWG Colorado’s interest in the gas-fired Arapahoe generating facility to SWG Arapahoe. According to the applicants, the jurisdictional facilities consist of SWG Colorado’s Arapahoe facility, and SWG Colorado’s contracts, books and records associated with the Arapahoe facility.

SWG Arapahoe is a subsidiary of Southwest Generation Operating Co. LLC (SGOC), which is a wholly owned subsidiary of Southwest Generation Holding Co. LLC (SGHC), which in turn is a wholly owned subsidiary of Southwest Generation Parentco LLC. SWG Arapahoe does not currently own any jurisdictional facilities, but it entered into a power purchase agreement (PPA) with Public Service Co. of Colorado (PSCo) in July 2012 that provides for the sale of energy and capacity by SWG Arapahoe from the Arapahoe facility beginning on Jan. 1, 2014.

Applicants told FERC that before making any sales from the Arapahoe facility, SWG Arapahoe intends to file a notice of self-certification as an exempt wholesale generator (EWG) and also intends to file an application requesting authorization to make sales under the PPA at market-based rates.

SWG Colorado is an EWG with market-based rate authority. SWG Colorado is a subsidiary of SGOC, which is a wholly owned subsidiary of SGHC, which is, in turn, a subsidiary of Southwest Generation Parentco LLC.

SWG Colorado owns and operates two generating facilities in the PSCo balancing authority area: the Arapahoe facility, which has a generation capacity of 118 MW, and the gas-fired Valmont facility, which has a capacity of 82 MW. Applicants statde that Arapahoe and Valmont are interconnected with the transmission system operated by PSCo under separate Amended and Restated Generation Interconnection Agreements between PSCo and SWG Colorado.

SWG Arapahoe will acquire 100% of SWG Colorado’s interest in the Arapahoe facility. SWG Colorado will retain 100% of Valmont, and both SWG Arapahoe and SWG Colorado will remain subsidiaries of SGOC. The purpose of the transaction is an internal reorganization that will achieve a corporate separation of the Arapahoe and Valmont facilities.

Southwest Generation is a rapidly-growing, privately-held energy company based in Denver, Colo., that is building a diversified portfolio of natural gas-fired generation assets, said the company website.

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.