FERC okays transfer of Coughlin power plant among Cleco units

The Federal Energy Regulatory Commission on Aug. 26 approved the transfer of a 730-MW, gas-fired power plant from one Cleco Corp. affiliate to another.

On May 24, Cleco Power LLC and Cleco Evangeline LLC filed an application requesting commission authorization for the acquisition and disposition of jurisdictional facilities associated with the transfer from Evangeline to Cleco Power of the Coughlin Power Station. The jurisdictional facilities associated with the transaction consist of certain interconnection facilities, a wholesale power purchase agreement between Evangeline and Cleco Power (which will terminate upon closing of the proposed transaction), and an interconnection agreement between Evangeline and Cleco Power.

Evangeline is wholly owned by Cleco Midstream Resources LLC, which, in turn, is a direct subsidiary of Cleco Corp., the parent of Cleco Power. The Coughlin Power Station is a 730-MW, combined-cycle generating facility fueled by natural gas and located in Cleco Power’s balancing authority area. Coughlin Power Station is currently under contract to Cleco Power under a power purchase agreement (PPA) and is operating as a network resource.

The applicants told FERC that Coughlin’s common facilities include a transmission switchyard; a water treatment facility, and natural gas transmission lateral facilities interconnected to two interstate natural gas transmission lines (Columbia Gulf Transmission and Crosstex).

Through its 2012 integrated resource plan (2012 IRP), Cleco Power identified the level and kind of resources it required to meets its projected long-term needs for capacity and energy. In its 2012 IRP, Cleco Power analyzed its load profile, existing supply resources, and known future resources over a 20-year period beginning in 2015, with the objective of identifying resources that could meet Cleco Power’s load requirements reliably and at the lowest reasonable cost to its customers.

Cleco Power issued its 2012 Long-Term Request For Proposals (2012 RFP) in order to procure the resources identified in the 2012 IRP. The 2012 RFP was designed to comply with the competitive solicitation requirements contained in the Louisiana Public Service Commission’s 1983 General Order, as amended, and in its Market Based Mechanism Order (MBM Order), as amended.

The applicants told FER that in consultation with Louisiana commission staff and an independent monitor, Cleco Power chose this transaction as the bid supplying the greatest net system benefit into its 2012 Long-Term RFP securing low-cost, reliable generation to meet its projected needs for dependable power supply.

This transaction will take place according to the Master Reorganization and Contribution Agreement, dated as of Dec. 18, 2012, by and among Evangeline, Cleco Corp., and Cleco Power. The transaction structure specified in the agreement is designed to be a non-taxable transfer of the Coughlin Power Station from Evangeline to Cleco Power.

Applicants state that because Evangeline currently owns all of the referenced facilities, the transaction is a transfer between affiliates and, thus, has no impact on vertical market power. The transaction is currently under review at the Louisiana commission, and the companies expect a decision by the commission’s regular February 2014 Business and Executive Session.

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.