Various affiliates of Exelon Corp. (NYSE: EXC) with market-based rate authority filed an April 30 notice at the Federal Energy Regulatory Commission about a change in market power status because Exelon has acquired certain rights to the output of a wind farm.
Exelon Generation Co. LLC is a direct, wholly-owned subsidiary of Exelon that has commission-granted market-based rate authority. Exelon Generation entered into an agreement with J.P. Morgan Ventures Energy Corp. (JPMVEC) that will result in Exelon Generation being assigned JPMVEC’s rights and obligations under certain contracts for the purchase and sale of the output of the Stateline Wind Energy Project. The Stateline Project is a wind facility with approximately 300 MW of aggregate nameplate capacity located in the states of Oregon and Washington within the PacifiCorp-West (PACW) balancing authority area (BAA). The Stateline Project is owned and operated by FPL Energy Vansycle LLC, which sells the output of the facility at market-based rates.
Prior to the transaction, JPMVEC purchased from FPL Energy Vansycle the entire output of the Stateline Project and re-sold a combined total of 290 MW to the Bonneville Power Administration, Eugene Water & Electric Board, and Seattle City Light under long-term agreements. As a result of the transaction, Exelon Generation will purchase from Vansycle the entire output of the Stateline Project and re-sell a combined total of 290 MW to these same buyers. Accordingly, only about 10 MW of uncommitted generation capacity will be added to the total uncommitted generation capacity owned or controlled by Exelon Generation and its affiliates in the PACW BAA as a result of the transaction.
Exelon Generation has not yet received consents to assign all of the contracts affected by the transaction, the April 30 notice said. But under the terms of the transaction, Exelon Generation began receiving the economic benefits and was exposed to the economic risks associated with the purchase and sale of the output of the Stateline Project as of April 1, and could be deemed to “control” the output of the Stateline Project as of that date. Therefore, for purposes of this notice of change in status, Exelon Generation is conservatively treating the transaction as closed as of April 1.