FERC clears sale of Red Oak gas-fired power plant to Carlyle

Finding no market power concerns, the Federal Energy Regulatory Commission on Oct. 11 approved the sale of a 776-MW, gas-fired plant in New Jersey to Cogentrix Red Oak Holdings LLC.

On Sept. 13, Red Oak Power LLC sought authorization for the disposition of jurisdictional facilities resulting from the transfer of 100% of the ownership interests in Red Oak Power Holdings LLC, which indirectly owns 100% of the ownership interests in Red Oak Power, to Cogentrix Red Oak Holdings LLC.

Red Oak Power owns an approximately 776-MW combined cycle, natural gas-fired facility and related interconnection facilities located in the Borough of Sayreville, Middlesex County, N.J., within the PJM Interconnection balancing authority area (BAA).  The facility is located in the PJM-East submarket.

Red Oak Power is an exempt wholesale generator (EWG) and is authorized to make wholesale sales of electric energy, capacity, and ancillary services at market-based rates.  The facility’s entire output is committed to TAQA Gen-X LLC through a long-term tolling agreement set to expire in 2022.

Red Oak Holdings’ interests are held directly by four affiliated investment funds: Energy Capital Partners II-A LP; Energy Capital Partners II LP; Energy Capital Partners II-B (Red Oak) LP; and Energy Capital Partners II-C (Red Oak IP) LP.

Cogentrix is a wholly-owned subsidiary of Cogentrix Power Holdings IV LLC, which is ultimately controlled by The Carlyle Group.

Red Oak Power stated that Cogentrix is not affiliated with any electric generating, transmission, or distribution facilities in PJM-East submarket, which, according to Red Oak is the relevant market for the proposed transaction. Red Oak states that through its affiliation with The Carlyle Group, Cogentrix is affiliated with two electric generating facilities in the PJM BAA: Portsmouth Genco LLC and James River Genco LLC.

  • Portsmouth owns and operates a 114.8-MW facility in Portsmouth, Va. The facility is interconnected to the transmission system owned by Dominion Virginia Power and operated by PJM. Portsmouth sells the full net electrical output of its facility to Northern Virginia Electric Cooperative (NOVEC) under a long-term power purchase agreement.
  • James River owns and operates a 114.8-MW facility in Hopewell, Va. This facility has a steam host that consumes the steam equivalent of about 26 MW of its electrical output. James River sells the remaining net electrical output (about 89 MW) to NOVEC under a long-term power purchase agreement.
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.