Talen Energy (NYSE:TLN) is looking at possibly selling the 1,100-MW Harquahala combined-cycle gas plant in Arizona — or moving all or part of the generating equipment from its current location to either the Mid-Atlantic or Northeast markets.
The issue was touched upon by Talen President and CEO Paul Farr and other company officials during a May 10 quarterly earnings conference call with Wall Street analysts.
The moves are being considered largely because the plant, which Talen purchased from MACH Gen, is under-utilized at its current location in Maricopa County, Arizona, company officials have indicated.
GenerationHub data indicates that Harquahala had a capacity factor of only 11.3% in 2014.
Relocation of all-or-part of the generating capacity back East would require a significant capital expenditure, company officials noted during the call.
“It is an underutilized asset in the Southwest,” said a Talen spokesperson.
“Since we acquired the plant from MACH Gen, we have been exploring options to optimize its value, including selling it to a load-serving entity in the Southwest, entering into a PPA with a load-serving entity in the Southwest, or moving it to the East,” the spokesperson said.
“It will come down to which option creates the greatest value for stockholders in the long run,” the spokesperson told GenerationHub.
Harquahala is a three-unit gas plant that became operational in 2004.
New Harquahala Generating Company, LLC, is an indirect subsidiary of Talen Energy Supply that owns generating operations in Arizona.