New contracts with Southern California Ed worked out by two cogenerators

New-Indy Oxnard LLC and New-Indy Ontario LLC, which own cogenerators in California, on Oct. 29 applied with the Federal Energy Regulatory Commission for market-based rate authority due to a change in their power sales contracting situations.

Both applicants are subject to identical upstream ownership and control and both are affiliated with generating facilities in the identical region and balancing authority area (BAA).

  • New-Indy Oxnard owns and operates an approximately 28.2 MW (maximum net) qualifying facility (QF), which is located in Oxnard, California, in the California Independent System Operator BAA.
  • New Indy-Ontario owns and operates an approximately 40.7 MW (maximum net) QF, which is located in Ontario, California, in the CAISO BAA.

Each QF is interconnected with Southern California Edison (SCE) and each currently provides energy, capacity and certain ancillary services to SCE under a PURPA-contract. Upon the expiration of the PURPA-contract, Oxnard and Ontario will each enter into a new power purchase agreement with SCE for the full wholesale capacity of their respective facilities, the term of which will commence on Jan. 1, 2016, in the case of Ontario, and April 1, 2016, in the case of Oxnard (called the “2016 PPAs”).

The sole reason for this application is the fact that the applicants have been advised that the 2016 PPAs are not PURPA contracts. Although each project is and remains a cogeneration QF, out of an abundance of caution and consistent with disclosure requirements, market-based rate authority is now being sought. Neither Oxnard nor Ontario will have the ability to sell any wholesale capacity or energy except under the 2016 PPAs.

The steam output of the Oxnard system is fully utilized by the adjacent paper mill to operate the paper machine and associated processes. Electricity from the Oxnard QF is used to power the mill with the excess sold to the interconnecting utility, SCE. All of thermal output of the Oxnard QF and approximately half of the electrical output of the Oxnard QF are for the purpose of serving the mill’s paper process.

Steam from Ontario’s generating facility is delivered exclusively to and used exclusively by the New Indy Ontario Paper Mill. Specifically, steam is supplied to the paper mill process steam system. Additional steam for the mill is provided by a package boiler producing 325 psi steam. The package boiler provides no wholesale electricity, but has provided steam to a 6.0 MW condensing steam turbine; as of the date of this filing, this steam turbine is in the process of being permanently removed from service. Electricity from the Ontario QF is used to power the mill and adjacent International Paper-owned box plant with the excess sold to the interconnecting utility, SCE. All of the paper mill thermal requirements are supplied by the Ontario QF.

The applicants are both 50% indirectly owned by The Kraft Group LLC and 50% indirectly owned by Schwarz Partners LP.

  • The Kraft Group is a privately-owned, family-managed company, which is indirectly controlled by the Kraft family and headquartered in Foxborough, Massachusetts. The Kraft Group is the holding company for the Kraft family’s various businesses, with concentrated interests in five areas: paper and packaging manufacturing and the distribution of forest products; sports and entertainment; real estate development; private equity investing and philanthropy.
  • Schwarz Partners, based in Indianapolis, Indiana, is a family-owned company with interests in various businesses with a major focus on packaging, sheet feeders and transportation.
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.