By Rich Heidorn Jr.
Talen Energy asked FERC on Friday to allow it to sell four generators totaling 1,351 MW in eastern PJM to satisfy divesture conditions the commission set in a December order approving the company’s formation (EC14-112).
In their application to spin off their generation into the new company, PPL and Riverstone Holdings proposed two mitigation packages.
One involved divestiture of six Riverstone plants, and one PPL plant, in New Jersey and Pennsylvania totaling 1,315 MW. The second involved the same six Riverstone plants, plus the 399-MW Crane coal-fired plant in Maryland and two PPL hydro plants in Pennsylvania, for a total of 1,346 MW. (See PPL, Riverstone Accept FERC Mitigation Plan on Talen Spinoff.)
Talen now says it wants to replace the two divestiture packages with a third involving the Crane plant and three former PPL generators in Pennsylvania: the 660-MW Ironwood combined-cycle plant, the 248-MW Holtwood hydro plant and the 44-MW Wallenpaupack hydro generator.
Talen said its request was the result of its inability to negotiate a lease extension for its 158-MW combined-cycle plant in Bayonne, N.J., which was part of both previous divestiture options.
The Bayonne plant provides steam to a tank terminal storage facility, which owns the land beneath the generator. The storage facility is owned by a subsidiary of Macquarie Infrastructure Co., the Australian conglomerate.
Macquarie informed Riverstone last October of its intention not to extend the lease on the generator. (In February, Macquarie agreed to purchase the nearby Bayonne Energy Center, a 512-MW gas-fired generator, from ArcLight Capital Partners.)
Talen said efforts to negotiate an extension of the lease beyond its current expiration in October 2018 “proved futile,” forcing it to retire the plant effective Nov. 1, 2018.
“Accordingly, divesting the Bayonne facility could prove challenging,” Talen said. The proposed “Option 3” divestiture package will provide “the market more flexibility to identify the assets more highly valued by potential purchasers,” it said.
Talen said the revised divestiture plan would have essentially the same reduction in the company’s market power.
The company — which is required to complete its divestiture by June 1, 2016 — asked FERC to rule on its request by Nov. 30.
