Tucson Electric Power on Sept. 26 filed with the Federal Energy Regulatory Commission a Second Amended and Restated Ownership Agreement related to its pending purchase of gas-fired capacity in Arizona.
The agreement is among Gila River Power LLC (GRP), Sundevil Power Holdings LLC, Tucson Electric Power and UNS Electric. Tucson Electric and UNS Electric are both subsidiaries of UNS Energy.
GRP is an indirect, wholly-owned subsidiary of Entegra Power Group LLC. It owns a portion of the Gila River Power Station, which consists of four approximately 550-MW natural gas-fired combined cycle units located in Maricopa County, Arizona. They are interconnected to the Arizona Public Service (APS) transmission network within the APS balancing authority area. GRP currently owns Power Blocks 3 and 4.
Sundevil is an indirect, wholly-owned subsidiary of funds managed by Wayzata Investment Partners LLC, a private equity firm based in Wayzata, Minnesota.
GRP and Sundevil had entered a 2010 agreement in connection with the sale by GRP to Sundevil in 2010 of Power Block 2 of the Power Station and a 25% undivided interest in the common assets of the of the Power Station.
GRP and Sundevil into a 2011 agreement to reflect Sundevil’s subsequent purchase from GRP in 2011 of Power Block 1 and an additional 25% undivided interest in the Common Assets.
In December 2013, Tucson Electric and UNS Electric jointly entered into an agreement to purchase Power Block 3, as well as an undivided 25% interest of the Common Assets from GRP. An application for approval of that deal is currently pending before the commission.
“Upon the closing of the Transaction, the Parties desire to enter into the Second Amended and Restated Ownership Agreement, which will replace and supersede the Amended and Restated Ownership Agreement to set forth the terms and conditions of the Parties’ respective undivided interest in the Common Assets and to reflect Tucson Electric’s and UNS Electric’s respective ownership of Power Block 3 of the Power Station,” said the Sept. 26 filing. “The Second Amended and Restated Ownership Agreement concerns the ownership of Power Blocks 1-4 of the Power Station and the Common Assets.
“The Power Station is comprised of four ‘Power Blocks,’ each consisting of two combustion turbines, two heat recovery steam generators, and one steam turbine, and each with an individual rating of approximately 550 MW (net). As of the date of this filing, Sundevil owns Power Blocks 1 and 2, GRP owns Power Block 4, and Tucson Electric and UNS Electric will, subject to regulatory authorization, co-own Power Block 3.
“The Second Amended and Restated Ownership Agreement also describes the ownership among the Parties of the Common Assets associated with the Power Station, including the 500 kV generation switchyard connecting the Power Station to the transmission system at the APS-operated Jojoba and Panda Gila River Switchyards, the Power Station control system, site facilities including warehouses or other buildings, water collection and delivery systems, and natural gas distribution pipelines.”
Entegra Power Group sought Chapter 11 bankruptcy protection in August, but indicated in a court filing that it planned to follow through with the Gila River unit sale to Tucson Electric Power and UNS Electric later this year.