LS Power Development to buy several hydro projects from FirstEnergy

LS Power Development LLC said in a Sept. 4 filing at the Federal Energy Regulatory Commission that it has tentative deals to buy several hydro projects, including the Seneca Pumped Storage facility in Pennsylvania from FirstEnergy (NYSE: FE).

A newly-created LS Power affiliate, Seneca Generation LLC, on Sept. 4 asked the commission to: accept for filing the proposed market-based rate tariff for Seneca Generation; authorize Seneca Generation to sell energy, capacity, and certain ancillary services at market-based rates; and grant such waivers and blanket authorizations as the commission has granted to other entities with market-based rate authorization.

Seneca Generation was formed for the purposes of acquiring, owning, and operating the Seneca Pumped Storage Station, which has a generating capacity of about 451 MW (summer rating), and is located in Warren, Pa., at the U.S. Army Corps of Engineers’ Kinzua Dam on the Allegheny River. The Seneca Project is located in the PJM Interconnection market. Seneca Generation is filing concurrently for such approvals under Sections 8 and 203 of the Federal Power Act (FPA) as may be deemed to be required in connection with its acquisition of the Seneca Project, and will also file a notice of self-certification of exempt wholesale generator (EWG) status.

Seneca Generation is a wholly owned subsidiary of Harbor Hydro Holdings LLC, which is an indirect, wholly owned subsidiary of LS Power Development LLC (LSP Development). LSP Development is the general partner of LS Power Associates LP. LSP Development develops, owns, and operates independent power projects in the U.S., and is, among other things, developing merchant transmission projects in parts of the United States.

Seneca Generation’s acquisition of the Seneca Project from FirstEnergy Generation LLC is part of a larger transaction in which three of Seneca Generation’s affiliates, Lake Lynn Generation LLC, All Dams Generation LLC and PE Hydro Generation LLC, will also be acquiring hydroelectric facilities from two other subsidiaries of FirstEnergy, Allegheny Energy Supply Co. LLC (AE Supply) and Green Valley Hydro LLC (Green Valley).

LSP Development has the following subsidiaries that own or control (or that will own or control) generating facilities in the PJM market:

  • Lake Lynn Generation, which will own and operate Lake Lynn Hydroelectric Station, which has generating capacity of about 52 MW (summer rating), located between Fayette County, Pa., and Monongahela County, W.Va., on the Cheat River. Lake Lynn Generation will acquire this facility from AE Supply;
  • All Dams Generation, which will own and operate Allegheny Lock & Dam Unit 5 and Allegheny Lock & Dam Unit 6, which are run-of-river hydro stations with a combined capacity of about 14 MW (summer rating), located in Freeport, Pa., on the Allegheny River. All Dams Generation will acquire Allegheny 5 & 6 from AE Supply;
  • PE Hydro Generation will acquire the hydroelectric facilities below from AE Supply and Green Valley Hydro:

  1. Dam No. 4 Hydro Station on the Potomac River and Dam No. 5 Hydro Station on the Potomac River, which are run-of-river hydroelectric stations with combined capacity of about 2.9 MW (summer rating), located in Berkeley and Jefferson counties, W.Va., on the Potomac River;
  2. The Millville Project, a run-of-river hydroelectric project with a capacity of about 2.4 MW (summer rating), located in Jefferson County, W.Va., on the Shenandoah River;
  3. The jointly-licensed Luray and Newport projects, run-of-river hydro projects with combined capacity of about 2.4 MW (summer rating), located in Page County, Va., on the Shenandoah River;
  4. The Shenandoah Project, a run-of-river hydro project with capacity of about 0.9 MW (summer rating), located in Page County, Va., on the Shenandoah River; and
  5. The Warren Project, a run-of-river hydro project with capacity of around 0.8 MW (summer rating), located in Warren County, Va., on the Shenandoah River.

  • Doswell Limited Partnership, an EWG that owns and operates an approximately 814 MW (summer rating) natural gas-fired facility in Ashland, Va.;
  • LSP Safe Harbor Holdings LLC, a power marketer that owns, and markets the output associated with, a 33.33% economic interest (and a 50% voting interest) in Safe Harbor Water Power Corp., an EWG that owns and operates an approximately 418 MW (summer rating) hydro facility in Lancaster County, Pa.;
  • LSP University Park LLC, an EWG that owns and operates an approximately 504-MW (summer rating) natural gas-fired, simple-cycle facility located near University Park, Ill.;
  • Riverside Generating Co. LLC, an EWG that leases and operates and has the right to the output from an approximately 825 MW (summer rating) natural gas-fired facility in Lawrence County, Ky.;
  • Rocky Road Power LLC, an EWG that owns and operates an approximately 327 MW (summer rating) natural gas-fired facility in East Dundee, Ill.;
  • University Park Energy LLC, an EWG that owns and operates an approximately 300 MW (summer rating) natural gas-fired peaking facility located about 30 miles south of Chicago, Ill.; and
  • White Oak Solar Energy LLC, which owns and operates an approximately 10 MW (summer rating) solar-powered qualifying facility in Dover, Del.

For purposes of past market power analyses, LSP Development and its subsidiaries have been assumed to be affiliated with Calpine Corp. and its subsidiaries based on LSP Development and certain of its actual and assumed affiliates being authorized to acquire, collectively with their affiliates, up to 40% of Calpine’s common stock and their ownership of more than 10% of Calpine’s common stock. As indicated in a recent filing, LSP Development and its actual and assumed affiliates now own, collectively, less than 10% of Calpine’s common stock. Accordingly, Calpine and its subsidiaries were not treated as affiliates of Seneca Generation for purposes of this application.

Another affiliate of LSP Development, West Deptford Energy LLC, is developing a 748 MW (nameplate) natural gas-fired facility in West Deptford, N.J. This facility is not expected to achieve commercial operation until mid-2014.

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.