FERC OKs sale of 11 FirstEnergy hydro plants; license transfers pending

The Federal Energy Regulatory Commission has approved the sale by multi-state utility FirstEnergy Corp. of 11 hydro plants of 530 MW in three states to a unit of independent developer LS Power Group.

Under its authority to regulate the nation’s bulk electricity system, FERC issued a Nov. 1 order authorizing “disposition and acquisition of jurisdictional facilities” by the two companies.

Although FirstEnergy applied Sept. 4 to transfer 10 hydropower licenses as part of the deal, FERC said the license transfers are pending and would be addressed in a separate order. The commission noted an intervenor in the proceeding, Seneca Nation of Indians, gave notice it plans to file a competing hydro license application for the biggest project, the 451-MW Seneca Pumped-Storage project on the Allegheny River in Pennsylvania.

In approving the sale, FERC said the transaction is in the public interest, based on its effects on competition, rates, and regulation of electricity markets. It also found that the deal would not result in cross-subsidization of a non-utility company by an affiliated utility.

FirstEnergy announced in May it had begun implementation of a plan to sell up to 1,240 MW of unregulated non-core hydroelectric assets. An LS Power affiliate purchased generating assets of PPL Corp. in 2011 including PPL’s one-third share in Safe Harbor Water Power Corp., owner of the 380.39-MW Safe Harbor hydroelectric project (No. 1025) on the Susquehanna River in Pennsylvania.

FirstEnergy’s sale to LS Power includes:

  • 451-MW Seneca Pumped-Storage (No. 2280), licensed as the Kinzua project for Kinzua Dam, which impounds its lower reservoir on the Allegheny River in Pennsylvania;
  • 9.5-MW Allegheny Lock & Dam 5 (No. 3671) on the Allegheny River in Pennsylvania;
  • 8.5-MW Allegheny Lock & Dam 6 (No. 3494) on the Allegheny River in Pennsylvania;
  • 51.2-MW Lake Lynn (No. 2459) on the Cheat River in West Virginia;
  • 2.84-MW Millville (No. 2343) on the Shenandoah River in West Virginia;
  • 1.9-MW Dam No. 4 (No. 2516) on the Potomac River in West Virginia;
  • 1.2-MW Dam No. 5 (No. 2517) on the Potomac River in West Virginia;
  • 750-kW Warren (No. 2391) on the Shenandoah River in Virginia;
  • 3-MW Luray and Newport (No. 2425) comprising the 1.6-MW Luray development and the 1.4-MW Newport development on the South Fork Shenandoah River in Virginia; and
  • 860-kW Shenandoah (No. 2509) on the South Fork Shenandoah River in Virginia.

FirstEnergy said a sale agreement was reached in August and, if approved, is expected to close in the fourth quarter of 2013. The agreement is subject to closing conditions including approvals of FERC, the Virginia Corporation Commission, and other entities.

FirstEnergy said the sale represents less than 3 percent of its generating capacity. Its subsidiary, Allegheny Generating Co., will continue to own 1,200 MW of the 2,484-MW Bath County Pumped-Storage project (No. 2716) in Virginia. Additionally, its subsidiary, Jersey Central Power & Light, will continue to own 200 MW of the 364.5-MW Yards Creek Pumped-Storage project (No. 2309) in New Jersey.

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