An application was filed Oct. 7 at the New York State Public Service Commission for approval of the sale of 2,169 MW of power plant capacity to an affiliate of ArcLight Capital Partners LLC.
Astoria Generating Co. LP, TPF II Power Holdings LLC, TPF II Power Midco LLC and Eastern Generation LLC requested a declaratory ruling that the New York PSC need not review under Public Service Law (PSL) Section 70 the indirect transfer of control of electric generating facilities directly owned by Astoria Generating in New York. The facilities, which are subject to the commission’s lightened regulation, are:
- Astoria Generating Station, an approximately 1,337 MW (summer rating) facility located in Astoria, Queens, New York;
- Gowanus Generating Station, an approximately 549 MW (summer rating) facility located in Brooklyn, New York; and
- Narrows Generating Station, an approximately 283 (summer rating) MW facility located in Brooklyn, New York.
The indirect transfer of control would result from the acquisition of 100% of the direct membership interests in TPF II Power Midco by Eastern Generation from TPF II Power Holdings, which indirectly wholly owns Astoria Generating.
In the alternative, the companies requested commission approval, without modification or condition, pursuant to PSL Section 70 and any other statutory or regulatory provision deemed applicable, to consummate the proposed deal.
“The Proposed Transaction will not result in any adverse impacts in New York,” the companies said. “Eastern Generation is not planning to make physical changes to the Facilities nor does Eastern Generation have plans to make changes in the day-to-day operations, including the Facilities’ staff and the on-site organizational structure and lines of authority and communication. No competitive issues are raised by the Proposed Transaction. Eastern Generation and its affiliates do not own or control any generation in New York, and therefore the Proposed Transaction will have no adverse effect on market concentration in New York.”
The petitioners asked the commission to approve this petition and issue a declaratory ruling, or, in the alternative, an order approving the transaction, on or before its Dec. 17, 2015, session.
The selling companies are ultimately controlled by Tenaska
Astoria Generating, TPF II Power Holdings, and TPF II Power Midco Astoria Generating are owned 1% by Astoria Generating Company GP LLC as sole general partner, and 99% by Astoria Generating Company Acquisitions LLC as limited partner. Astoria GP’s membership interests are owned by Astoria Acquisitions. Astoria Acquisitions’ membership interests are owned by Astoria Generating Co. Holdings LLC. Astoria Holdings’ membership interests are owned by US Power Generating Company LLC (USPG).
USPG was originally formed to acquire merchant generating facilities and other competitive power assets. It is wholly owned by TPF II USPG Holdings LLC. TPF II Holdings is wholly owned by TPF II Power LLC. TPF II Power is wholly owned by TPF II Power Midco. TPF II Power Midco is wholly owned by TPF II Power Holdings, which is an affiliate of Tenaska Energy Inc. Tenaska and its affiliates are one of the largest private, independent energy companies in the United States.
In addition to the New York facilities to be sold, Tenaska is affiliated with four generating facilities outside of New York that will be transferred to Eastern Generation as part of the proposed transaction. The filing said that Eastern Generation will acquire, indirectly, 100% of the ownership interests in the four generating facilities, which include an 825 MW (summer rating) facility in Ohio, a 623 MW facility (summer rating) and a 300 MW facility (summer rating) in Illinois, and a 1,040 MW generating facility (summer rating) in Michigan.
The filing didn’t further identify these four plants, but did note that the facility in Michigan is currently interconnected in the Midcontinent Independent System Operator (MISO) market. However, following completion of new interconnection facilities in 2016, the facility will be interconnected with the PJM Interconnection market. For purposes of this New York petition, the market power analysis includes this facility in the PJM market. The Tenaska website shows that the 1,100-MW New Covert plant in Michigan will be switched from MISO to PJM in 2016.
The Tenaska website says about the three New York plants: “US Power Generating Company (‘USPowerGen’) owns and operates fifty-three generating units at three facilities with a total average capacity of over 1,900 Megawatts (MW) through its Astoria Generating Company subsidiary. USPowerGen subsidiary sells energy and capacity into the NYISO deregulated market. The company represents generation sufficient to serve approximately 20% of the overall load in New York City.”
ArcLight, the buyer, controls capacity in the nearby PJM market
Eastern Generation is controlled by ArcLight Capital Partners LLC. ArcLight-controlled investment funds are affiliated with generation capacity located in various U.S. markets. In the markets controlled by PJM, the ArcLight funds currently are affiliated with entities that own or control approximately 2,217 MW of generation capacity, including:
- Chief Conemaugh Power LLC, the owner of a 35.11% undivided ownership interest in the 1,711 MW (summer/winter) coal-fired Conemaugh station located in New Florence, Pennsylvania. Chief Conemaugh has rights to approximately 601 MW of energy and capacity from the facility.
- Chief Keystone Power LLC, the owner of a 44.45% undivided ownership interest in the 1,711 MW (summer/winter) coal-fired Keystone station located in Shelocta, Pennsylvania. Chief Keystone has rights to approximately 761 MW of energy and capacity from the facility.
- CPV Shore LLC, the developer of a 725 MW gas-fired combined-cycle facility that will be located in New Jersey.
- Panther Creek Power Operating LLC, the lessee and operator of a 94 MW qualifying facility (QF) located in Nesquehoning, Pennsylvania; and
- Westwood Generation LLC, the owner of a 36 MW generating facility located in Tremont, Pennsylvania.
The output of these facilities is sold on a merchant basis into the wholesale market.
ArcLight also in the process of buying several wind farms
In addition, the ArcLight funds will be affiliated with approximately 298 MW of generation capacity in the PJM market following consummation of a pending transaction with Infigen Energy US Corp. and Infigen Energy US Holdings LLC that was authorized by FERC. Specifically, the ArcLight Funds will be affiliated with the following additional entities in the PJM market:
- Allegheny Ridge Wind Farm LLC, the owner of an 80 MW wind facility located in Cambria and Blair counties, Pennsylvania.
- Crescent Ridge LLC, the owner of a 54.45 MW wind facility located in Bureau County, Illinois.
- GSG LLC, the owner of an approximately 80 MW wind facility located in Lee and La Salle counties, Illinois.
- Mendota Hills LLC, the owner of a 52 MW wind facility located in Compton, Lee County, Illinois.
- Jersey-Atlantic Wind LLC, the owner of an approximately 7.5 MW wind facility located in Atlantic City, New Jersey; and
- Wind Park Bear Creek LLC, the owner of an approximately 24 MW wind facility located in the Township of Bear Creek, Luzerne County, Pennsylvania.
Of this additional 298 MW in PJM, approximately 294 MW is committed under long-term agreements with unaffiliated third parties. Thus, the ArcLight funds are (or soon will be) affiliated with approximately 2,515 MW of generating capacity in PJM, of which 294 MW is under long term agreements.
Following the proposed transaction, ArcLight will be affiliated with approximately 5,459 MW of generating capacity in PJM, again, without taking into account the 294 MW under long term agreements.
The ArcLight funds are not affiliated with any generation located in the New York Control Area. In the market administered by ISO New England (ISO-NE), the ArcLight funds are affiliated with the approximately 19.4 MW Worumbo hydroelectric facility. None of the ArcLight funds’ affiliates owns or controls generating facilities or transmission facilities in the markets administered by the New York Independent System Operator (NYISO).
Under this deal, Eastern Generation will acquire 100% of the direct membership interests in TPF II Power Midco from TPF II Power Holdings. As a result, Astoria Generating will become a wholly-owned indirect subsidiary of ArcLight Fund VI.