The Southern Company Services unit of Southern Co. (NYSE: SO) on Feb. 1 filed with the Federal Energy Regulatory Commission a market power update showing that Southern subsidiaries have lately begun taking power from a number of wind and solar projects.
The triggering event for this filing was the Dec. 12, 2015, consummation of Southern Power’s acquisition of Kay Wind LLC. In addition to an increase of generation capacity owned or controlled, directly or indirectly, by Southern Companies as a result of the Kay Wind acquisition, Southern Companies reported the following (any event prior to Dec. 12, 2015, being less than the relevant materiality threshold for change in status reporting):
On Jan. 1, 2016, deliveries commenced under a long-term Energy Purchase Agreement (EPA) with Morgan Stanley Capital Group Inc. as the seller. The EPA obligates Morgan Stanley to deliver to Gulf Power a fixed number of megawatt hours each hour of each month of each year throughout a 20-year term. Morgan Stanley’s firm delivery commitment (and Gulf Power’s reciprocal energy receipt commitment) is shaped to match the projected hourly and monthly output of a 178 MW portion of a facility known as the Kingfisher Wind Farm, located in Oklahoma.
In addition, Gulf Power was party to a long-term, firm Power Purchase Agreement (PPA) with Florida Power and Light (FP&L) under which 163 MW of Plant Scherer Unit 3 (of which Gulf Power owns a 25% undivided interest) was subject to the market control of FP&L. That PPA expired as of Jan. 1, 2016.
On Jan. 1, 2016, deliveries commenced under a PPA between EDP Renewables North America LLC and Georgia Power for the firm sale of energy and capacity benefits for a 20-year term, from the 151-MW Blue Canyon II wind farm in Oklahoma (BCII PPA). The BCII PPA terminates on Dec. 31, 2035. Also on Jan. 1, 2016, deliveries commenced under a PPA between EDP and Georgia Power for the firm sale of energy and capacity benefits for a 20-year term, from the Blue Canyon VI wind farm (BCVI PPA), also located in Oklahoma. The BCVI PPA also terminates on Dec. 31, 2035.
In addition, as of Jan. 1, 2016, a portion of Georgia Power’s 75% ownership share of the coal-fired Plant Scherer Unit 3, which was formerly committed to a long-term, firm PPA with FP&L, returned to the market control of Southern Companies due to the relevant PPA expiring.
On Dec. 1, 2015, deliveries of 6 MW of unit firm capacity and energy commenced under an “Amendment to the Contract for the Purchase of Firm Capacity and Energy from a Renewable Qualifying Facility Utilizing the Proxy Unit Methodology” entered in August 2014 between MAS Energy Inc., the Coca-Cola Co. and Georgia Power.
On Dec. 18, 2015, and Jan. 1, 2016, deliveries of 174 MW of unit firm energy commenced under several PPAs (for terms ranging from 20 to 30 years), each certified and/or approved for retail load service and cost recovery by the GPSC and entered by Georgia Power under Georgia Power’s 2015 and 2016 Advanced Solar Initiative Prime and the 2015 Advanced Solar Initiative.
- Richland Solar Center: On Dec. 18, 2015, delivery of 20 MW of unit firm energy commenced under the agreement for the purchase of solar energy between Georgia Power and Richland Solar Project LLC. The Richland PPA is for a term of 20 years.
- Decatur Parkway Solar: On Dec. 18, 2015, delivery of 84 MW of unit firm energy commenced under a contract for the purchase of solar energy between Georgia Power and Decatur Parkway Solar LLC. The Decatur Parkway PPA is for a term of 25 years. The Decatur Parkway facility is owned by Southern Power, and therefore is categorized as being under Southern Companies control.
- Decatur County Solar: On Dec. 18, 2015, delivery of 20 MW of unit firm energy from a qualifying small power production facility commenced under a contract for purchase of solar energy between Georgia Power and Decatur County Solar Project LLC. The Decatur County PPA is for a term of 20 years. The Decatur County facility is also owned by Southern Power.
- LS Pawpaw: On Jan. 1, 2016, delivery of 30 MW of unit firm energy commenced under an agreement for the purchase of solar energy and environmental attributes between LS-Pawpaw LLC and Georgia Power. The Pawpaw PPA is for a term of 30 years. The LS Pawpaw facility is owned by Southern Power.
- Butler Solar Farm: On Jan. 1, 2016, delivery of 20 MW of unit firm energy from a qualifying small power production facility commenced under a contract for the purchase of solar energy between Georgia Power and Butler Solar Farm LLC. The Butler Solar Farm PPA is for a term of 20 years.
- Solar Glynn LLC: On Jan. 1, 2016, delivery of 20 MW of unit firm energy commenced under a contract for the purchase of solar energybetween Georgia Power and Solar Glynn LLC. The Solar Glynn PPA is for a term of 20 years.
On Dec. 11, 2015, Southern Power consummated the acquisition of upstream, controlling membership interests in Kay Wind. All of the generation capacity of the 299-MW Kay Wind facility, located in Kay County, Oklahoma, within the balancing authority area of the Southwest Power Pool, is committed under long-term firm PPAs to the Grand River Dam Authority and Westar Energy for terms of 20 years.
Also, Morelos Solar LLC is a 15-MW qualifying small power production facility in the California Independent System Operator Balancing Authority Area and owned by Southern Turner Renewable Energy LLC (an indirect subsidiary subject to the operating and managerial control of Southern Power through Southern Renewable Energy LLC). Morelos commenced commercial operations in late November 2015. The electricity generated by Morelos is committed to and subject to the market control of Pacific Gas & Electric under a 20-year PPA.
A long-term firm sale of capacity and energy by Southern Power (or subsidiaries) that involved a transfer of market control of generating capacity to others for purposes of Southern Companies’ generation resource inventory, have expired. Specifically, a long-term PPA under which 600 MW of Southern Power’s Harris 1 and 190 MW of Southern Power’s Franklin 1 generation facilities were conveyed to the market control of FP&L expired as of Jan. 1, 2016.
In addition, Southern Power’s long-term firm PPA with Constellation Energy for the 155 MW of capacity and associated energy from Franklin 3 expired as of Jan. 1, 2016.
Further, a long-term sale of capacity and energy involving a transfer of market control of Oleander Power Project Unit 1 (155 MW) to TECO Energy also expired as of Jan. 1, 2016.
Offsetting these changes, commencing Jan. 1, 2016, 345 MW of Southern Power’s Franklin 2 generation facility, formerly attributed solely to the market control of Southern Companies, now is subject to a long-term firm PPA commitment to Morgan Stanley/Jackson and Greystone EMC. As a result of these changes, the attribution of control over Harris 1, Franklin 1-3, and Oleander 1 have been revised and updated in the attached generation resource inventory.
Southern Power is also obligated to provide requirements service under certain long-term requirements supply arrangements with various electric membership cooperatives (EMCs) and municipal utility systems. In exchange for assuming certain firm requirements obligations, Southern Power is granted market control to generation resources owned or contractually committed to these wholesale requirements customers. As of Jan. 1, 2016, additional resources of these wholesale requirements customers, commensurate with changes to the resource rights held by such customers for purposes of serving loads, have become subject to the market control of Southern Power. These generation resources have been added to Southern Companies’ generation resource inventory as capacity conveyed from others. The specific additional generation resources are (winter/summer ratings):
- TA Smith 1 (94/82 MW);
- TA Smith 2 (94/82 MW);
- Hazelhurst Solar (11 MW);
- Hawk Road 1 (54/50 MW);
- Hawk Road 2 (54/50 MW); and
- Hawk Road 3 (63/49 MW).
These changes are offset, in part, by the expiration of:
- the Hawk Road Energy (Dynegy PPA), involving 298 MW, formerly held by one of Southern Power’s wholesale requirements customers and subject to Southern Companies’ market control; and
- a long-term PPA by AL Sandersville LLC for 280 MW of firm capacity and energy to Southern Power, also formerly attributed for purposes of Southern Companies’ generation resource inventory to Southern Companies.