Western Generation settles with Texas PUC staff on Borger power plant buy

Filed Sept. 21 at the Public Utility Commission of Texas was a draft order worked out by Western Generation Partners LLC and commission staff that would approve a July 25 application covering Western Generation’s proposed acquisition of 100% of the ownership interests in the Borger Facility, a 230-MW, gas-fired plant.

This facility is located near Borger, Texas, in the Southwest Power Pool region. Western Generation is a joint venture among Harbert Power Fund V LLC, UBS Asset Management Funds Ltd. and The Northwestern Mutual Life Insurance Co.

The Borger Facility at this point is wholly owned by Borger Energy Associates LP, which is a wholly owned subsidiary of First Reserve Energy Infrastructure Fund.

HPF V, UBSI and NML have formed Westem Generation, a joint venture holding company that will own, indirectly, 100% of the membership interests in a Delaware limited liability company to be formed that will act as the buyer under a Purchase and Sale Agreement. The seller will convey 100% indirect ownership interest in the Borger Facility to Western Generation.

UBSI and NML, through subsidiaries, own electric generation facilities in Texas that offer electricity for sale in the state. As a result of the transaction, Western Generation will also acquire a 604-MW gas-fired facility located outside of the state but within SPP.

The proposed order and the application itself don’t further identify this second, 604-MW plant. The application gives a list of plants that Western Generation would control after this transaction, including 100% of the 604-MW, gas-fired Hobbs plant in the SPP region. That is the only facility on the list anywhere near the 604-MW figure.

Notable is that in December 2011, equity investor First Reserve Corp. announced that it had agreed to acquire a diversified portfolio of U.S. contracted natural gas-fired power plants totaling 1,068 MW from Arclight Capital. These assets were: Crockett Cogen Project, a 240-MW natural gas cogeneration plant located in Crockett, CA; Hobbs Generating Station, a 604-MW natural gas CCGT power plant located in Hobbs, NM; the Borger Plant, a 230 MW natural and refinery gas cogeneration plant located in Borger, TX; and Waterside Power Holdings LLC, a 72-MW oil-fired peaker plant located in Stamford, CT.

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.