FERC approval sought for sale of three California power plants

Goal Line LP, KES Kingsburg LP and Colton Power LP on Dec. 23 requested Federal Energy Regulatory Commission authorization due to the sale of direct and/or indirect ownership interests in these companies to indirect, wholly owned subsidiaries of Southwest Generation Operating Co. LLC (SGOC), under three separate Purchase and Sale Agreements (PSAs) each dated as of Dec. 22

Goal Line owns a 49.9 MW natural gas-fired cogeneration plant located in Escondido, California, which is interconnected with the transmission system owned by San Diego Gas & Electric (SDG&E) within the California Independent System Operator (CAISO) Balancing Authority Area (BAA). Goal Line sells electricity generated by the Goal Line Facility to SDG&E pursuant to a long-term power purchase agreement.

The Goal Line Facility is a qualifying cogeneration facility (QF) under the Public Utility Regulatory Policies Act of 1978 (PURPA). The commission has granted Goal Line market-based rate authority, and Goal Line is an exempt wholesale generator (EWG) under the Public Utility Holding Company Act of 2005.

Goal Line’s sole general partner is Arroyo Energy LP. It is also affiliated with investment funds managed by affiliates of FIG LLC, an investment adviser. General Electric Capital Corp., which also is a lender to Goal Line, has a 0% limited partnership interest in Goal Line.

Kingsburg is the lessee and operator of a 34.5 MW natural gas-fired facility located in Kingsburg, California, which is interconnected to the transmission system owned by Pacific Gas and Electric (PG&E) within the CAISO BAA. Kingsburg sells the output of the Kingsburg Facility to PG&E under the terms of a long-term power purchase agreement that gives PG&E exclusive buyer and scheduling rights over the Kingsburg Facility. Kingsburg has been granted market-based rate authority, and is an EWG.

Kingsburg operates the Kingsburg Facility under a long-term lease with the passive owner of the Kingsburg Facility, DBD Kingsburg LLC.

Colton owns and operates two, approximately 40-MW natural gas-fired facilities located in the City of Colton, California. Colton has entered into a Resource Adequacy contract with Shell Energy North America (US) LP, pursuant to which, among other things, it bids to sell the electrical output of the Colton Facilities into CAISO on a daily basis. Colton has been granted market-based rate authorization, and is an EWG.

SWG California Holdings LLC is a direct, wholly owned subsidiary of SGOC. SGOC is a wholly-owned subsidiary of Southwest Generation Holding Company II LLC (SGHC). SGHC , in turn, is a wholly owned subsidiary of Southwest Generation Parentco LLC, which is managed by a Board of Directors appointed by members of the limited liability company.

The buyer has newly-formed, special-purpose entities formed for the purpose of acquiring all ownership interests in Goal Line, Kingsburg and Colton.

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.