Sempra to sell 625-MW Mesquite unit in Arizona to ArcLight

Mesquite Power LLC applied Nov. 5 at the Federal Energy Regulatory Commission for approval of the transfer of 100% of its direct membership interests to Mesquite Power Holdings LLC, a wholly-owned indirect subsidiary of ArcLight Energy Partners Fund V LP.

Mesquite Power owns a 625-MW combined cycle facility and associated assets (called Block 2) at the larger Mesquite Generating Station in Arizona. Mesquite Power is a wholly-owned, direct subsidiary of Sempra Generation LLC, which in turn is a wholly-owned indirect subsidiary of Sempra Energy.

Sempra Generation is the seller under a long-term power purchase agreement (PPA) for the sale of energy at wholesale negotiated rates of up to 271 MW of firm, day-ahead power, delivered to the Common Bus beginning on January 1, 2015 to a group of unaffiliated wholesale purchasers, which are 21 members of the Southwest Public Power Resources Group (SPPR Group), an association of 40 not-for-profit utilities in Arizona and southern Nevada. Although Block 2 of the Mesquite Generating Station may be used to source the 271-MW power deal, the power contract does not require deliveries from Block 2, or from any specific generation source.

The buyer of Mesquite Power is a wholly-owned indirect subsidiary of ArcLight Fund V, which is a private equity fund managed by ArcLight Capital Partners LLC.

The interconnection facilities for the power plant are jointly owned as tenants-in-common by Mesquite Power, its affiliate Mesquite Solar 1 LLC, and by the Salt River Project (SRP). Mesquite Power and SRP each own a 50% membership interest in Mesquite Power Operations LLC, which operates the Mesquite Generating Station.

Sempra is asking FERC for an approval by December so it can close this deal in that month. It noted that the commission had approved a similar 2013 transaction involving Mesquite Power’s sale of another 625-MW combined cycle facility and associated assets (Block 1) at the Mesquite Generating Station to the Salt River Project.

A Sempra contact is: Daniel A. King. Sempra U.S. Gas & Power LLC, 101 Ash Street HQ15, San Diego, CA 92101, (619) 696-4350, daking@semprausgp.com.

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.