FERC signs off on Covanta’s buy of the 32-MW Camden plant

The Federal Energy Regulatory Commission on June 6 granted an approval related to the planned buy by Covanta Energy Corp. of the 32-MW Camden waste-fired plant in New Jersey.

On May 2, Covanta Energy and Camden County Energy Recovery Associates LP filed a joint application for authorization for the disposition of jurisdictional facilities. Two wholly owned direct or indirect subsidiaries of Covanta Energy would acquire 100% of the ownership interests in Camden, which is owned by Camden County Energy Recovery Corp, and Foster Wheeler Inc. The jurisdictional facilities consist of interconnection facilities, market-based rate tariffs and related contracts, books and records.

Covanta Energy is a wholly owned subsidiary of Covanta Holding Corp., which is engaged in the energy and insurance businesses through its subsidiaries. Relevant to this application, within the PJM Interconnection balance authority area (BAA), Covanta Energy’s affiliates that own and/or operate generation facilities consist of:

  • Covanta Alexandria/Arlington Inc., which owns and operates an approximately 21-MW waste-to-energy qualifying small power production facility in Alexandria, Va. Covanta Alexandria sells the entire output of its facility to Dominion Virginia Power under a long-term contract;
  • Covanta Delaware Valley LP, which leases and operates an approximately 79.5 MW waste-to-energy qualifying small power production facility located in Chester, Pa. Covanta Delaware Valley is an Exempt Wholesale Generator (EWG) with market-based rate authority and its electric output is sold under long-term contract to Atlantic City Electric;
  • Covanta Essex Co., which owns and operates an approximately 68 MW waste-to-energy qualifying small power production facility in Newark, N.J. Covanta Essex is a EWG with market-based rate authority and has an option to sell its power to Public Service Electric & Gas under a long-term contract. However, Covanta Essex currently sells its power directly into the PJM market;
  • Covanta Fairfax Inc., which owns and operates an approximately 79 MW waste-to-energy qualifying small power production facility in Fairfax, Va. Covanta Fairfax is a EWG which sells its entire output to Dominion Virginia Power under a long-term contract;
  • Covanta Plymouth Renewable LP, which owns and operates an approximately 32-MW waste-to-energy qualifying small power production facility located in Plymouth Meeting, Pa. Covanta Plymouth is authorized to sell power at market-based rates, and it sells the output of its facility to PECO Energy pursuant to a long-term agreement;
  • Covanta Union Inc., which leases and operates an approximately 45-MW waste-to-energy qualifying small power production facility located in Rahway, N.J. Covanta Union is authorized to sell power at market-based rates and it sells into the PJM market;
  • Covanta Warren Energy Resource Co. LP, which owns and operates an approximately 11-MW waste-to-energy qualifying small power production facility in Oxford Township, N.J. Covanta Warren sells the entire output of the facility to Jersey Central Power and Light under a long-term contract; and
  • Pacific Energy Operating Group LP, which leases a 3-MW qualifying small power production facility in Gude, Md., that is operated by Covanta Power Pacific Inc. and is owned by 8309 Tujunga Avenue Corp., a wholly owned subsidiary of Covanta Holding.

In addition, Covanta Energy has interests in the following entities that operate generation facilities on behalf of municipalities or agencies: Covanta Harrisburg Inc.; Covanta Lancaster Inc.; Covanta Montgomery Inc.; and Covanta York Renewable Energy LLC.

Camden is a 32-MW plant burning municipal solid waste

Camden owns and operates a 32-MW small power production facility in Camden County, N.J. within the PJM East submarket and the PJM BAA. The facility is interconnected with transmission facilities owned and controlled by Public Service Electric & Gas. The primary fuel source is biomass in the form of municipal solid waste, which is combusted on reciprocating stoker grates.

Camden is owned by Covanta Corp. and Foster Wheeler, which are indirect, wholly owned subsidiaries of Foster Wheeler AG, a Swiss holding company whose shares are publicly traded on the NASDAQ stock market. Covanta Corp. holds a 1% general partnership interest and Foster Wheeler holds a 99% limited partnership interest in Camden.

This transaction will be done in accordance with an Equity Purchase Agreement by and between Covanta Energy, Covanta Corp. and Foster Wheeler, which provides that Covanta Energy (or other Covanta entities) will acquire Covanta Corp.’s 1% general partnership interest in Camden and Foster Wheeler’s 99% limited partnership interest in Camden.