FERC okays NorthWestern buy of 80-MW Beethoven Wind project in South Dakota

The Federal Energy Regulatory Commission on Sept. 21 approved a July 24 application from NorthWestern Corp. and Beethoven Wind LLC for approval of NorthWestern’s buy of the generating assets associated with Beethoven’s 79.55 MW wind facility located in South Dakota, within the Western Area Power Administration–Upper Great Plains East (WAUE) balancing authority area.

The jurisdictional facilities affected by the Proposed Transaction consist of Beethoven’s market-based rate tariff, contracts, books, and records, and its approximately seven-mile 115-kV generator interconnection line and associated equipment used to interconnect the facility to transmission facilities owned by NorthWestern.

Pursuant to two long-term power purchase agreements (PPAs), NorthWestern is contractually entitled to all of the facility’s electrical output through June 2035. Beethoven is an exempt wholesale generator (EWG) and a qualifying facility (QF) with market-based rate authority.

Beethoven is a wholly owned subsidiary of BayWa r.e. Wind LLC (BayWa Wind), which is 95% owned by BayWa r.e. USA LLC (BayWa USA) and 5% owned by the President and CEO of BayWa Wind. BayWa USA is a wholly owned subsidiary of BayWa r.e. renewable energy Gmbh (BayWa Gmbh), a company organized under the laws of Germany. BayWa Gmbh is a wholly owned subsidiary of BayWa AG, also a company organized under the laws of Germany.

NorthWestern is a regulated public utility engaged in the generation, transmission, and distribution of electricity and supply transportation of natural gas.

Under this now-approved deal, NorthWestern will acquire from BayWa Wind 100% of the membership interests of Beethoven. Upon closing, Beethoven will be merged into NorthWestern. At that point the PPAs would be terminated.

NorthWestern proposed to record the acquisition at the purchase price of about $143 million to better reflect the true value of the facility. But, the commission said its regulations require plant assets acquired as an operating unit or system to be recorded at the depreciated original cost if they have previously been devoted to utility service (called the “original cost rules”). “The Beethoven facility is an operating unit or system, and wholesale sales of electric energy were made from the facility pursuant to a Commission approved market-based rate tariff,” the Sept. 21 order said. “Beethoven entered commercial operations on May 28, 2015. Consequently, the Facility was previously devoted to public service, and the accounting for the transaction should follow the Commission’s original cost rules.”

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.