Tenaska seeks FERC approval to sell 4,953 MW of capacity to ArcLight

Several affiliates of Tenaska Energy on Oct. 8 filed with the Federal Energy Regulatory Commission for approval of the sale of 4,953 MW of mostly gas-fired capacity by Tenaska to funds managed by Arclight Capital Partners LLC.

One of these Tenaska affiliates, Astoria Generating Co. LP, had filed on Oct. 7 at the New York State Public Service Commission for approval of the sale of its three plants in New York to ArcLight.

Filing the Oct. 8 FERC application was Astoria Generating, Crete Energy Venture LLC, Lincoln Generating Facility LLC, New Covert Generating Co. LLC and Rolling Hills Generating LLC. They requested FERC authorization for the disposition of jurisdictional facilities that will result from a transaction whereby the Eastern Generation LLC affiliate of ArcLight will acquire 100% of the indirect equity ownership interests in these companies.

Following the transaction, the project companies will be wholly-owned indirect subsidiaries of Eastern Generation, which is a wholly-owned indirect subsidiary of ArcLight Energy Partners Fund VI LP.

The parties said they intend to close the transaction as soon as possible, subject to obtaining all necessary regulatory authorizations. Accordingly, they requested a 21-day comment period and a commission decision on or before Dec. 7, 2015.

The project companies are currently affiliated with Tenaska Energy and certain other generation-owning entities through controlling interests owned by certain individuals. Tenaska is an independent developer and owner of power production facilities located throughout the U.S.

Astoria Generating is an exempt wholesale generator (EWG) with market-based rate authority that owns and operates the following facilities located in the New York City (NYC) sub-market of the New York Independent System Operator market:

  • The Astoria Generating Station, an approximately 1,333 (summer rating) natural gas- and oil-fired facility in Astoria, Queens. The summer rating for the Astoria station conservatively includes the capacity of Astoria Unit 4, which currently is mothballed;
  • The Gowanus Gas Turbine Station, an approximately 549 MW (summer rating) fuel oil- and natural gas-fired facility consisting of simple cycle combustion turbine units on barges in Gowanus Bay in Brooklyn; and
  • The Narrows Station, an approximately 283 MW (summer rating) natural gas- and fuel-oil fired facility consisting of simple-cycle combustion turbine units on barges in Upper New York Bay in Brooklyn.

As for the other project companies:

  • Crete is an EWG with market-based rate authority that owns and operates an approximately 300 MW (summer rating) natural gas-fired generation facility in Crete, Illinois. This facility is in the PJM Interconnection market.
  • Lincoln is an EWG with market-based rate authority that owns and operates an approximately 623 MW (summer rating) natural gas-fired facility in Manhattan, Illinois. This facility resides within the PJM market.
  • New Covert is an EWG with market-based rate authority that owns and operates an approximately 1,040 MW (summer rating) natural gas-fired, combined-cycle facility in Van Buren County, Michigan. This facility is in the Midcontinent Independent System Operator market, but is expected to move to the PJM market once new interconnection facilities are completed, which is expected to occur on June 1, 2016.
  • Rolling Hills is an EWG with market-based rate authority that owns and operates an approximately 825 MW (summer rating) natural gas-fired facility in Vinton County, Ohio (in the PJM market).

In the MISO market, the ArcLight-managed funds are affiliated with Michigan Power LP, which owns a 128 MW (summer rating) natural gas-fired combined cycle qualifying cogeneration facility located in Ludington, Michigan. Substantially all of the output of this facility is committed to Consumers Energy under a long-term power purchase agreement that is in effect until October 2030. The remaining output of the facility is sold on a merchant basis into the wholesale market.

The ArcLight-managed funds are not affiliated with any entity that owns or controls generation located in the New York ISO market or the NYC sub-market, the application noted. ArcLight funds do have interests in several power plants in PJM, including several wind farms (total of 298 MW) that they are about to buy, but they would not exercise any market control in PJM with the addition of the Tenaska plants, the application said.

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.