Owner of stake in Arizona coal plant granted market authority by FERC

The members of the Federal Energy Regulatory Commission on March 17 granted Alterna Springerville LLC authority to make wholesale sales of electric energy, capacity, and ancillary services at market-based rates, effective Jan. 1 of this year.

Additionally, the commission granted Alterna’s request for waiver of the commission’s requirements to file an Open Access Transmission Tariff (OATT), to establish and maintain an Open Access Same-Time Information System (OASIS), and to comply with the commission’s Standards of Conduct. It also granted Alterna’s request for other waivers commonly granted to market-based rate sellers. Additionally, it found that Alterna meets the criteria for a Category 1 seller in all regions and is so designated.

Alterna owns a 43% undivided interest in the Springerville Generation Station Unit 1, a 425-MW coal-fired power facility located near Springerville, Arizona, in the Tucson Electric Power balancing authority area. Alterna and Tucson Electric Power were parties to a long-term lease that expired on Jan. 1, 2015, pursuant to which Tucson Electric Power leased all of Alterna’s interest in the Springerville Facility. Alterna told FERC in an application last fall that upon expiration of the lease, Alterna might commence making wholesale sales of electric energy, capacity, and/or ancillary services in accordance with its interests in the Springerville Facility.

Alterna said the Springerville Facility includes interconnection facilities that are limited and discrete facilities necessary to interconnect to the Tucson Electric Power transmission grid. Alterna states that these interconnection facilities consist of a 7.2 kV generator tie line that is approximately 2,600 feet long. Alterna states that, except for the interconnection facilities located at the Springerville Facility, neither it nor its affiliates own, operate, or control any transmission facilities in the United States.

Alterna is indirectly wholly owned by Alterna Core Capital Assets Fund LP, a limited partnership formed by Alterna Capital Partners, a private-equity firm. Alterna states that the fund is wholly owned by individuals. The fund indirectly owns an undivided interest in the Merom Generating Station (Merom Facility), a 1,070 MW coal-fired, dual unit steam-electric station located in Sullivan County, Indiana. Alterna further states that the Merom Facility is operated by Hoosier Energy Rural Electric Cooperative.

Members of FERC on Feb. 19 had rejected a complaint by owners of part of the coal-fired Springerville plant that claimed that Tucson Electric Power was not giving them good transmission access for their power production. The commission denied a complaint filed in November 2014 by Alterna Springerville LLC, LDVF1 TEP LLCWilmington Trust Co. and William J. Wade against Tucson Electric, requesting firm transmission service over a specified path to a specific delivery point at Palo Verde.

Complainants and Tucson jointly own the Springerville Generating Station Unit 1. Complainants and Tucson are parties to separate 1986 leaseback agreements under which Tucson leased a 195 MW energy entitlement in Springerville 1. The lease agreements expired on Jan. 1, 2015. Upon expiration of the agreements, complainants’ energy entitlement, representing 50.5% (195 MW) of the capacity in Springerville Unit 1, reverted back to the complainants, who are now responsible for marketing their respective generation output.

In order to transmit their share of the Springerville Unit 1 generation, complainants require transmission service from Tucson, over the San Juan-Springerville-Vail transmission system, a network of transmission facilities running from the San Juan Generating Station in northwestern New Mexico to the Vail Substation in southeastern Arizona. Tucson has offered complainants firm transmission service with a delivery point of the San Juan Generating Station or the Four Corners Power Plant. Complainants requested delivery to Palo Verde, which they said was a better path for this power.

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.