4C Acquisition LLC (4CA), the new owner of part of the coal-fired Four Corners power plant, on Sept. 16 requested that the Federal Energy Regulatory Commission accept for filing its Market-Based Rate Tariff and otherwise grant it the authority to sell energy and capacity in wholesale transactions at negotiated, market-based rates.
These sales would in the market administered by the California Independent System Operator (CAISO), and its first-tier Balancing Authority Areas (BAAs) including PacifiCorp East (PACE), Salt River Project Agricultural Improvement and Power District (SRP), Western Area Power Administration–Lower Colorado (WALC), Western Area Power Administration–Colorado/Missouri (WACM), Imperial Irrigation District (IID), Public Service Co. of New Mexico (PNM) and Los Angeles Department of Water and Power (LADWP).
4CA said it is not requesting market-based rate authorization for the Tucson Electric Power (TEP) BAA at this time due to its affiliate Arizona Public Service‘s (APS) pending Section 206 proceeding, although the results of APS’s Delivered Price Test filed in that proceeding demonstrate the lack of ability to exercise market power. Additionally, 4CA is not requesting market-based rate authorization in the APS BAA.
4CA, a wholly-owned subsidiary of APS parent Pinnacle West Capital Corp. (PNW), is a newly-formed company. 4CA is currently authorized to make power sales of one week or less at cost-based rates. 4CA owns a 7% interest in the Four Corners Power Plant, a coal-fired facility located on the Navajo Nation in Fruitland, New Mexico, about 25 miles west of Farmington, New Mexico. The remaining 93% of Four Corners is owned, in varying shares, by APS, Public Service Co. of New Mexico, Salt River Project and Tucson Electric Power.
Four Corners is located within the APS Balancing Authority Area.
Notable is that 4C Acquisition on Aug. 19 filed with the Federal Energy Regulatory Commission its Rate Schedule No. 6, Transfer of Functional Control Agreement with sister company APS. On July 6 of this year, 4CA acquired a 7% ownership interest in the Four Corners plant, a 1,540 MW coal-fired facility, 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.