Carthage Energy LLC and Allegany Generating Station LLC on July 22 asked the Federal Energy Regulatory Commission for prior authorization for two proposed transactions having to do with existing power plants.
They asked for approval for: the transfer of 100% of the ownership interests in Carthage from Cayuga Energy Inc., a wholly-owned indirect subsidiary of Iberdrola USA Inc., to Alliance Energy New York LLC (AENY); and Allegany’s acquisition of the Allegany generating station and related assets from Rochester Gas & Electric (RG&E).
Allegany is a wholly-owned direct subsidiary AENY. AENY is a direct subsidiary of Alliance Energy Group LLC (AEG). After closing of the proposed transaction, Carthage will also be a wholly-owned indirect subsidiary of AEG.
The proposed transaction results from an open auction process under a divestiture order of the New York State Public Service Commission (NYSPSC). In September 2008, the NYPSC approved Iberdrola S.A.’s acquisition of Energy East Corp., the then-parent of RG&E. The NYSPSC conditioned its approval of the Iberdrola-Energy East merger, among other items, on the divestiture of any and all fossil-fueled generating assets in New York State that Iberdrola acquired through the transaction.
In November 2008, RG&E and Cayuga filed a divestiture plan with the NYSPSC, which included the Allegany facility and Cayuga’s membership interest in Carthage. The first attempt to auction these facilities combined with others was unsuccessful. In October 2011, RG&E and Cayuga filed a modified fossil asset divestiture plan with the NYSPSC. That new plan was approved by the NYSPSC in December 2011. The now-proposed transaction is the result of implementing that new plan.
Carthage owns a 62.9 MW (nameplate) dual fuel (gas/oil) combined-cycle cogen located in Carthage, N.Y. The Carthage facility is interconnected to the transmission system owned by Niagara Mohawk Power d/b/a National Grid and under the operational control of the New York Independent System Operator (NYISO).
Carthage is an exempt wholesale generation (EWG) and FERC has authorized Carthage to engage in wholesale sales of energy, capacity, and ancillary services at market-based rates. Carthage sells all of the output from its facility into the wholesale markets operated by NYISO.
Allegany plant to also change hands
RG&E owns a 67-MW (nameplate) gas-fired combined-cycle plant located in Hume, N.Y. The Allegany facility is interconnected to the transmission system owned by RG&E. RG&E sells all of the output from the Allegany facility into the wholesale markets operated by NYISO. The Allegany facility is not currently operational, requiring certain repairs before returning to service which are projected to require approximately four months, the July 22 filing noted.
Allegany was formed in 2013 and currently holds no assets. It has been formed for the purpose of implementing the transaction pursuant to which it will acquire and continue to operate the Allegany facility. Allegany is a direct, wholly-owned subsidiary of AENY, which in turn is wholly-owned by AEG.
Through subsidiaries, AEG is engaged in electric power generation, natural gas exploration, production and transportation, and energy technology research into various forms of renewable fuels such as biodiesel and hydropower. AEG is wholly-owned by an individual, Samuel Nappi.
In addition to Allegany, AENY owns, directly and indirectly, 100% of the partnership interests in: Lowell Cogeneration Co. LP, the owner of a 33.5-MW (nameplate) natural gas and fuel oil-fired combined-cycle facility located in Lowell, Mass.; Power City Partners, the owner of a 103.1-MW (nameplate) natural gas, fuel oil, and biofuel-fired combined-cycle facility located in Massena, N.Y; Seneca Power Partners LP, the owner of a 67.3-MW (nameplate) facility located in Batavia; Sterling Power Partners LP, the owner of a 67.3-MW (nameplate) facility located in Sherrill; and AGEnergy LP, which owns a 99.3-MW plant in Ogdensburg that is no longer in service. The output of the Power City, Seneca and Sterling facilities are sold into the NYISO market. The output of the Lowell facility is sold into the ISO New England (ISO-NE) market.
In addition to AENY, AEG also owns 100% of the membership interest of Alliance NYGT LLC, and indirectly, 100% of the membership interest of AER-NY-Gen LLC. Alliance NYGT owns the 46.5 (nameplate) MW Hillburn Gas Turbine located in Hillburn, N.Y., and the 41.9 (nameplate) MW Shoemaker Gas Turbine located in Middletown, N.Y. AER NY-Gen currently holds no assets. AEG is also affiliated with Alliance Energy Marketing LLC (AEM), formed to act as a marketer of wholesale power and other services.
Under the planned transaction, AENY will acquire 100% of the ownership interest in Carthage from Cayuga. Following the transaction, Carthage will be a wholly-owned direct subsidiary of AENY, which is a wholly-owned subsidiary of AEG. Cayuga will not retain any ownership interest in Carthage following the transaction. In addition, pursuant to the transaction, Allegany will acquire the Allegany facility and related assets from RG&E.