Navajo Nation entity to exercise option to buy 7% of Four Corners coal plant

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.

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.