Tenaska to sell power plants in West Virginia, Virginia to Avenue Energy

Tenaska Energy has agreed to sell power plants in West Virginia and Virginia to another company and the two Tenaska affiliates that control those plants on Feb. 16 filed for a Federal Energy Regulatory commission approval related to that sale.

Big Sandy Peaker Plant LLC, Wolf Hills Energy LLC and Middle River Power II LLC requested a one-time waiver of the 90-day prior notice requirement set forth in the PJM Interconnection Open Access Transmission Tariff with respect to Big Sandy’s and Wolf Hills’ informational filings. The filings are being submitted concurrently in connection with the planned transaction whereby the buyer (Middle River Power II) will acquire the membership interests of TPF Genco Holdings LLC, which indirectly owns Big Sandy and Wolf Hills, which, in turn, each own or control a generating facility that receives compensation for reactive supply and voltage control service.

The companies requested that the commission issue an order granting the waiver, with immediate, prospective effect, on or before April 1, or as soon possible thereafter in order to allow the parties to consummate the transaction without unnecessary delay as soon as other required regulatory approvals and third-party consents have been obtained.

  • Big Sandy is an exempt wholesale generator (EWG) that leases and operates an approximately 300 MW (summer rating) natural gas-fired facility located in Kenova, Wayne County, West Virginia, within the PJM market. The Big Sandy Facility is owned by Wayne County, West Virginia, and is leased to Big Sandy under a sale/leaseback arrangement. Big Sandy is an indirect, wholly-owned subsidiary of Tenaska Energy. Tenaska Energy is a privately held corporation and an independent developer and owner of power production facilities located throughout the United States.
  • Wolf Hills is an EWG that owns and operates an approximately 250 MW (summer rating) natural gas-fired facility located in Bristol, Washington County, Virginia, within the PJM market. Wolf Hills is also an indirect, wholly-owned subsidiary of Tenaska Energy.

The buyer is a direct, wholly-owned subsidiary of Avenue Energy Opportunities AIV LP, which is directly owned by: Avenue Energy Opportunities Partners LLC (the “General Partner”); Avenue Energy MRP II LP; and various passive limited partner investors

Upon consummation of the transaction, the buyer will indirectly own or control 100% of the membership interests in: Big Sandy, which includes the Big Sandy Reactive Rate Schedule that will remain with Big Sandy following the transaction; and Wolf Hills, which includes the Wolf Hills Reactive Rate Schedule that will remain with Wolf Hills following the transaction.

The terms of the transaction are set forth in a Purchase and Sale Agreement (PSA), dated as of Jan. 29, 2016, by and between Tenaska Power Fund LP and TPF Generation Co-Investment Fund LP, and the buyer. 

In connection with the transaction, Big Sandy, Wolf Hills, TPF Generation Holdings, and High Desert Power Project LLC will be seeking various regulatory approvals and third-party consents. Other than the expiration of the 90-day notice period that is the subject of this waiver request, all of the approvals and consents are expected to be obtained by April 1. The most time-consuming of these other approvals and consents is likely to be an application with FERC for approval under Section 203 of the Federal Power Act, which is being filed concurrently with this motion and requests expedited action and the issuance of an order by April 1.

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.