4C Acquisition LLC on Aug. 19 filed with the Federal Energy Regulatory Commission its Rate Schedule No. 6, Transfer of Functional Control Agreement with sister company Arizona Public Service (APS).
4C Acquisition (4CA), a wholly-owned subsidiary of Pinnacle West Capital Corp. (PNW), is a newly formed company that is in the business of directly and indirectly constructing, investing in, acquiring, and holding interests in electric generation facilities. 4CA is an affiliate of APS, a vertically-integrated public utility that is also a PNW subsidiary.
On July 6 of this year, 4CA acquired a 7% ownership interest in the Four Corners Power Plant, a 1,540 MW coal-fired facility located on the Navajo Nation in Fruitland, New Mexico, and the associated transmission interconnection facilities. However, a tribal entity, Navajo Transitional Energy Co. LLC (NTEC) or its designee, has the option to purchase all or a portion of 4CA’s ownership interest in Four Corners on or before July 6, 2017. The July 6 buy was from El Paso Electric, which is exiting coal-fired generation.
NTEC is a non-FERC jurisdictional entity that is wholly-owned by the Navajo Nation and chartered by the U.S. Department of the Interior. NTEC has notified 4CA that it intends to exercise its option, said the Aug, 19 application. Therefore, 4CA does not expect to own the interests in Four Corners long-term. In light of that, 4CA and APS have entered into an agreement pursuant to which 4CA will transfer functional control of its transmission assets to APS for the purposes of making such assets available for third-party use under APS’s OATT and Open Access Same-Time Information System (OASIS) under the terms and conditions set forth in the agreement.