A major growth project for the growing power generation segment of Canada-based AltaGas Ltd. is an expansion that would roughly triple the size of the gas-fired Blythe Energy Center in California, said AltaGas in an Aug. 10 final prospectus related to a C$5 billion shelf offering of various stock and debt instruments.
A shelf offering covers increments of stock and debt issued at future times of the company’s choosing. The net proceeds will be used for general corporate purposes, to repay indebtedness and to fund capital expenditures.
As of the end of 2014, the AltaGas Power segment includes 1,285 MW of generating capacity from gas-fired, coal-fired, wind, biomass and run-of-river assets, along with an additional 81 MW of assets under construction. On Jan. 8, 2015, AltaGas completed the acquisition of three western U.S. gas-fired power assets with a total generation capacity of 164 MW. As a result, AltaGas entered 2015 with 1,449 MW of total power generation capacity.
In 2014, the 195-MW Forrest Kerr and 16-MW Volcano Creek facilities were commissioned. The 66-MW McLymont Creek facility will be the third and final Northwest Project to come online, with commissioning expected in mid-2015. The 277-MW of Northwest Projects are contracted with 60-year electricity purchase agreements (PPAs) with the British Columbia Hydro and Power Authority (B.C. Hydro) that are fully indexed to the consumer price index. Impact Benefit Agreements are in place for the Northwest Projects, ensuring a cooperative and mutually beneficial relationship between the Tahltan First Nation and AltaGas.
“AltaGas owns Blythe Energy Inc. (‘Blythe’), which owns Blythe Energy Center, a 507 MW natural gas-fired power plant, associated major spare parts and a related 230 kV 67-mile electric transmission line in southern California,” said the prospectus. “Blythe is fully contracted under a PPA with Southern California Edison Company until July 31, 2020, at which point the facility is uniquely positioned to potentially serve both the [California ISO] and the [Desert Southwest Region of the Western Area Power Administration] markets. In 2014, AltaGas acquired Blythe II. Also in 2014, AltaGas acquired land for development located north of the Blythe Energy Center and directly adjacent to Blythe II. The development of both projects could potentially more than triple AltaGas’ current generating capacity in California over the medium and long-term.”
The prospectus said that Blythe II could more than double the capacity of the existing Blythe plant. On Aug. 7, an AltaGas company applied with the California Energy Commission for a revamp of the Blythe II project, which was first approved by the commission in 2005 in another form. This facility, to now be called the Sonoran Energy Project (SEP), will be a natural gas-fired, water-cooled, combined-cycle, 553-MW (net) facility, laid out using one-on-one single shaft arrangement utilizing a General Electric 7HA.02 gas turbine and a D652 steam turbine. The power block will consist of one natural gas-fired combustion turbine generator (CTG), one supplemental-fired HRSG, one steam turbine, an induced-draft cooling tower, and related ancillary equipment.
“AltaGas is also expanding the cogeneration fleet at Harmattan from 30 MW to 45 MW (‘Cogeneration III’),” the Aug. 10 prospectus added. “AltaGas is in the final stages of construction of Cogeneration III, which is being constructed to meet the increased power demand at Harmattan and to increase sales to the Alberta power market. Cogeneration III is expected to be in service in the third quarter of 2015.
“AltaGas owns 50 percent of the Sundance B power purchase agreements, giving it the rights to power output and ancillary services from coal fired base load generation [in Alberta] until December 31, 2020. AltaGas owns 117 MW of wind power generation capacity, as well as 35 MW of biomass generation capacity, from which all power generation is sold via long-term contracts.”
AltaGas looks at repowering three newly-acquired U.S. gas plants
The Aug. 10 prospectus, without adding details about specific plans and the plants themselves, also hints at “expectations for the future organic growth opportunities via repowering of the three Western U.S. gas-fired power assets acquired by AltaGas on January 8, 2015.”
The Federal Energy Regulatory Commission in December 2014 approved the sale of stakes in these three gas-fired power plants by Veresen Inc. to AltaGas. The plants are controlled by Brush Cogeneration Partners, Pomona Power Generation LLC and Ripon Cogeneration LLC.
- Brush owns and operates a combined-cycle, natural gas-fired facility with a capacity of about 70 MW, and associated interconnection facilities, located in Brush, Colorado. The Brush Facility is interconnected with the Public Service Co. of Colorado transmission system. Its output is fully committed under a long-term power purchase agreement with Tri-State Generation and Transmission Association that expires Dec. 31, 2019.
- Ripon owns and operates a qualifying natural gas-fired cogeneration facility with a capacity of approximately 49.5 MW, and associated interconnection facilities, located in Ripon, California. The Ripon Facility is interconnected with the Pacific Gas & Electric (PG&E) transmission system. The entire output of the Ripon Facility is currently fully committed under a power purchase agreement with PG&E that was entered into under the Public Utility Regulatory Policies Act of 1978 (PURPA). Beginning in Q1 2015, the entire output of the Ripon Facility was to begin being sold to PG&E under a long-term tolling agreement that will expire on May 31, 2018.
- Pomona owns and operates a qualifying natural gas-fired cogen facility with a capacity of approximately 44.5 MW, and associated interconnection facilities, located in Pomona, California (San Gabriel Facility). The San Gabriel Facility is interconnected with the Southern California Edison transmission system in the CAISO market. The entire output of the San Gabriel Facility is committed under a PURPA power purchase agreement with SCE that expires in January 2016.