New York PSC okay sought for sale of 72-MW Castleton plant

Castleton Energy Center LLC (CEC), Castleton Power LLC and Fortistar Castleton LLC filed an April 26 joint petition with the New York Public Service Commission for approval of new ownership for Castleton Power and its power plant.

They asked the commission for an order under Public Service Law (PSL) Section 70, approving, without modification or condition, the proposed transfer of 100% of the ownership interests held by CEC in Castleton Power to Fortistar Castleton. They said the transfer will not affect the operation of Castleton Power’s 72-MW (nameplate) gas-fired facility located in Castleton-on-Hudson, New York.

The petitioners also request that the commission confirm that the lightened regulatory scheme approved for Castleton Power will continue unchanged after the transfer.

They asked for a quick approval, by no later than the commission’s June 16, 2016 session.

The facility commenced operations in 1992 as a qualified cogeneration facility under both federal and state law under the ownership of Cogen Energy Technology LP. It was purchased by TransCanada Power (Castleton) LLC (TC Castleton) in 1999, and ceased to operate as a qualified cogeneration facility in 2002.

The Federal Energy Regulatory Commission determined TC Castleton to be an exempt wholesale generator (“EWG”) in 2002, and FERC approved TC Castleton’s market-based rate tariff in 2005.

In 2006, the New York commission held that the transfer of 100% of the ownership interests in TC Castleton by its indirect owner, TransCanada Power LP, to two Alberta corporations indirectly owned by EPCOR Utilities Inc. did not require approval under PSL Section 70, as tcommission held that TC Castleton would be lightly regulated, consistent with regulatory regimes afforded to other comparably situated EWGs participating in wholesale electric markets. As part of that transaction, TC Castleton was re-named EPCOR Power (Castleton) LLC.

In 2009, the New York commission approved the transfer of EPCOR Castleton under PSL Section 70 from EPCOR to CEC. The Commission also held that lightened regulation of the facility, CEC and its owners would continue in accordance with the prior 2006 order regarding the facility. As part of that transfer, EPCOR Castleton was re-named Castleton Power.

Castleton Power and CEC Castleton Power are the owner and operator of the facility. Castleton Power is wholly owned by CEC. CEC is wholly owned by Wayzata Opportunities Fund LLC, which is a private investment vehicle in which no single member or partner owns more than a 10% equity interest. The fund manager of Wayzata Opportunities Fund is Wayzata Investment Partners LLC.

The facility is interconnected with the transmission system of Niagara Mohawk Power d/b/a National Grid. The facility is an exempt wholesale generator and sells energy, capacity and ancillary services exclusively at wholesale into the New York Independent System Operator‘s competitive electricity markets.

Fortistar Castleton is a wholly-owned, indirect subsidiary of Fortistar LLC and was formed for the purpose of acquiring the ownership interests in Castleton Power. Fortistar engages in the generation or sale of power only from, or has ownership interests only in, electric facilities that are qualifying facilities under the Public Utilities Regulatory Policies Act of 1978 or entities that are exempt wholesale generators under the Public Utility Holding Company Act of 2005.

Fortistar indirectly wholly owns an approximately 55 MW (nameplate) natural-gas fired facility in North Tonawanda, New York, and an approximately 6 MW (nameplate) landfill gas-fired facility in Albany, New York. Fortistar also indirectly owns a 75.6% interest in an approximately 221 MW (nameplate) gas-fired facility in Lockport, New York.

In the transfer, Fortistar Castleton proposes to acquire 100% of the ownership interests in Castleton Power from CEC. Once the transfer is consummated, Fortistar will indirectly wholly own the facility.

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.