The Public Utility Commission of Texas on Nov. 1 approved an application from Western Generation Partners LLC for approval of the purchase of 100% of the ownership interests in the Borger Facility, a 230 MW gas-fired plant located near Borger, Texas, in the Southwest Power Pool region.
Western Generation is a new joint venture among Harbert Power Fund V LLC (HPF V), UBS Asset Management Funds Ltd. (UBSI), and The Northwestern Mutual Life Insurance Co. (NML).
On July 26, Western Generation filed this application. The Borger Facility is currently wholly owned by Borger Energy Associates LP, which is a wholly owned subsidiary of First Reserve Energy Infrastructure Fund.
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 Texas but within the SPP region.
The Federal Energy Regulatory Commission on Oct. 31 okayed a Sept. 19 application from WG Partners Acquisition LLC (as the buyer), plus various project companies, for approval of the sale of interests in those project companies. The Borger sale is part of that transaction, though Borger is not within FERC jurisdiction so the Borger sale was not specifically approved by FERC.
The to-be-sold project companies are Lea Power Partners LLC, Waterside Power LLC, Badger Creek Ltd., Chalk Cliff Ltd., Double C Generation LP, High Sierra Ltd., Kern Front Ltd., McKittrick Ltd., Bear Mountain Ltd. and Live Oak Ltd.
WG Partners Acquisition is an indirect joint venture holding company formed by Harbert Power Fund V LLC, UBS Asset Management Funds Ltd., on behalf of UBS International Infrastructure Fund II (UBS IIF II), and The Northwestern Mutual Life Insurance Co. The ownership interests in WG Partners Acquisition are: HPF V has approximately 49%, UBS IIF II has about 33%, and NML has about 18%. WG Partners Acquisition was formed for the purpose of acquiring these ownership interests in the project companies and does not own or control any jurisdictional assets.
The project companies in the sale package include:
- Lea Power is an exempt wholesale generator (EWG) with market-based rate authority. It owns and operates a 674-MW natural gas-fired facility located in Lea County, New Mexico. The Hobbs Generating Station is interconnected to the transmission system owned by Southwestern Public Service (SPS) and operated by SPP. The entire capacity of the Hobbs Generating Station is committed to SPS pursuant to a power purchase agreement that is in effect until 2033.
- Waterside Power is an EWG with market-based rate authority. It owns and operates a 69.6-MW liquid fuel-fired facility located in Stamford, Connecticut. The Waterside Facility is interconnected to the transmission system owned by Connecticut Light and Power (CL&P) and operated by ISO-NE. All of the output of the Waterside Facility is currently sold in the wholesale markets administered by ISO-NE under a contract for differences with CL&P that extends through May 31, 2024.
- Badger Creek is an EWG with market-based rate authority. Badger Creek owns and operates a 46-MW natural gas-fired facility located in Bakersfield, California. The Badger Creek Facility is interconnected to the transmission system owned by Pacific Gas and Electric (PG&E) and operated by CAISO. The entire capacity of the Badger Creek Facility is committed to PG&E pursuant to a seven-year tolling agreement that expires on April 30, 2021.
Borger Energy Associates LP (Borger) and Corona Energy Partners LTD (Corona), whose indirect ownership interests are being transferred to WG Partners Acquisition, own electric generating facilities that are QFs, but Borger and Corona are neither applicants nor do they have market-based rate authority.
- Borger owns and operates a 230-MW natural gas-fired cogeneration facility located near Borger, Texas. The Borger Facility is interconnected to the transmission system owned by SPS and operated by SPP. Borger sells all of the electric output from the Borger Facility to SPS under a long-term contract in effect through 2024.
- Corona owns and operates a 47-MW natural gas-fired cogeneration facility located in Corona, California. The Corona Facility is interconnected to the transmission system owned by Southern California Edison (SCE) and operated by CAISO. Corona sells all of the electric output from the Corona Facility to SCE under a long-term contract.