FERC Issues Order Approving Transfer of Licenses and Substitution of Applicants re FirstEnergy Generation, LLC et al, Kinzua Pumped Storage Project…

FERC Issues Order Approving Transfer of Licenses and Substitution of Applicants re FirstEnergy Generation, LLC et al, Kinzua Pumped Storage Project Under P-2280 et al

WASHINGTON, Jan. 16 -- The U.S. Department of Energy'sFederal Energy Regulatory Commission issued the text of the following delegated order:

FirstEnergy Generation, LLC

Seneca Generation, LLC

Project No. 2280-017

Allegheny Energy Supply Company, LLC

PE Hydro Generation, LLC

Project Nos. 2343-084, 2516-057, and 2517-036

Allegheny Energy Supply Company, LLC

All Dams Generation, LLC

Project Nos. 3494-091, 3671-086

Allegheny Energy Supply Company, LLC

Lake Lynn Generation, LLC

Project No. 2459-245

Green Valley Hydro, LLC,

PE Hydro Generation, LLC

Project Nos. 2391-046, 2425-052, and 2509-046

ORDER APPROVING TRANSFER OF LICENSES AND SUBSTITUTION OF APPLICANTS

(January 16, 2014)

1. By application filed September 4, 2013,the Transferor licensees and Transferees seek Commission approval, pursuant to Section 8 of the Federal Power Act (FPA) and Section 9 of the Commission's regulations, to transfer the licenses included in the following table:

Click here to view table: http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=13439438

Background

2. For P-2280, Kinzua Pumped Storage Project

The Commission issued a 50-year license to Pennsylvania Electric Company (PEC) and Cleveland Electric Illuminating Company in 1965. In 1999, the Commission approved the transfer of license to remove PEC as a co-licensee. In 2001, the Commission approved the transfer of license to FirstEnergy Generation Corporation, and in 2012, the Commission approved the transfer of license to FirstEnergy Generation, LLC.

3. For P-2343, Millville Project

The Commission issued a new 30-year license to Potomac Edison Company in 1987, and in 2000, it approved the transfer of the license to PE Transferring Agent, LLC, and then to Allegheny Energy Supply Company, LLC.

4. For P-2459, Lake Lynn Project

The Commission issued a 30-year license in 1994 to West Penn Power Company, and in 1999 it approved the transfer of the license from West Penn Company to West Penn Transferring Agent, LLC, and then to Allegheny Energy Supply Company, LLC.

5. For P-2516, Dam No. 4 Hydro Station Project

The Commission issued a new 30-year license to Allegheny Energy Supply Company, LLC, in 2004.

6. For P-2517, Dam No. 5 Hydro Station Project

The Commission issued a new 30-year license to Allegheny Energy Supply Company, L.L.C. in 2004.

7. For P-3494, Allegheny Lock & Dam No. 6 Project

The Commission issued a 50-year license in 1984 to Noah Corporation. In 1985, the Commission approved the transfer of license to Allegheny Number 6 Hydro Partners, and in 2009 to Allegheny Energy Supply Company, LLC.

8. For P-3671, Allegheny Lock & Dam No. 5 Project

The Commission issued a 50-year license in 1984 to the Borough of Central City and Mitex, Inc (jointly). In 1985, the Commission approved the transfer of license to the Borough of Central City and Allegheny Hydro Partners (jointly). In 1988, the Commission approved the transfer of license to Allegheny Hydro Partners, Ltd., and in 2009 to Allegheny Energy Supply Company, LLC.

9. For P-2391, Warren Project

The Commission issued a 30-year subsequent license in 1993 to the Potomac Edison Company, and it approved a transfer of the license toGreen Valley Hydro, LLC in 2005.

10. For P-2425, Luray and Newport Project

The Commission issued a 30-year license in 1993 to the Potomac Edison Company, and it approved the transfer of the license to Green Valley Hydro, LLC in 2005.

11. For P-2509, Shenandoah Project

In 1993, the Commission issued a subsequent license to the Potomac Edison Company, and it approved the transfer of the license to Green Valley Hydro, LLC in 2005.

12. Transfer or sand Harbor Hydro Holdings,LLC (Harbor Holdings)have entered into an agreement pursuant to which the assignees of Harbor Holdings(SenecaLLC,LakeLynnLLC,AllDams LLC, and PE Hydro LLC)will acquire from the ten hydroelectric projects referenced above(here in after collectively referred to as the Projects)contingent upon,interalia,the Commission's approval of the transfer of the licenses for the Projects from Transferors to Transferees. Furthermore, Transferees are part of the LS Power Group(LSPower),which, according to the transfer application, is a well-capitalized group of companies that develops, owns,manages ,and invests in power generation and electric transmission infrastructure throughout the United States.

13. The Transferors and/or Transferees also filed with the Commission on September 4, 2013, an application for authorization of the transaction pursuant to Section 203 of the FPA (203 Application), and applications for market-based rate authority for Transferees pursuant to Section 205 of the FPA (205 Applications). In orders issued November 1, 2013, the Commission approved the 203 and 205 Applications.

14. By letter of December 24, 2013, Commission Staff requested additional information (AIR) that it needed to complete its review of the transfer application. The letter requested certain information regarding the financial status and legal obligations of some of the companies identified in the transfer application. On December 26, 2013, the applicants filed a response to the AIR. Among other things, the applicants state that: (1) the Transferees will be well-capitalized and will have direct access to sufficient funding from equity contributions from the members and pursuant to a Credit Agreement between Harbor Holdings and several lenders to carry out their obligations; (2)the Transferees willhave access to a revolving credit facility that will provide $15 million tosupport project liquidity requirements and will be required to maintain reserves of approximately $10 million on average for maintenance and mandatory debt service during the term of the credit; (3)the Transferees have procured over $530 million of property/casualty insurance coverage and over $56 million of business interruption insurance coverage for the Projects; and (4)the Transferees have selecteda company to manage long-term operations and maintenance services for the projects that has over 20 years of experience in third party operations of over 214 power plants, including hydroelectric plants.

Discussion

A. Transfer of Licenses

15. Public notice of the transfer application was issued on September18, 2013, and established the deadline for filing comments and motions to intervene as 30days from the issuance date of the notice. Comments were filed by the Seneca Nation of Indians (Seneca Nation). A timely, unopposed motion to intervene and comments were filed by the Seneca Nation.

16. On November 26, 2013, the Seneca Nation withdrew its comments and intervention, stating that it has entered into a comprehensive settlement agreement with FirstEnergy Generation, LLC that resolvesthe issues that it raised in its comments.

17. Transferees have agreed to accept all of the terms and conditions of the licenses and to be bound by the licenses as if they were the original licensee. Transferors agree to pay annual charges that have accrued to the date of the transfers. Each Transferee will be required to comply with the requirements of its license as though it were the original licensee. Based on the foregoing, and the Transferees assurances regarding their financial and managerial plans, I conclude that transfer of the licenses for these projects is consistent with the Commission's regulations and is in the public interest.

B. Substitution of Applicants

18. The transfer application also requests substitution of the Transferees for the Transferors as the applicants in the pending applications for new license for the Kinzua Project No. 2280 and the Millville Project No. 2343. These requests are granted.

The Director orders:

(A) Transfers of the licenses for the projects listed in the table are approved.

(B) The Transferors shall pay all annual charges that accrue up to the effective date of the transfers.

(C) Substitution of Seneca Generation, LLC for FirstEnergy Generation, LLC as the applicant in the pending application for a new license for the Kinzua Project Project No. 2280is approved.

(D) Substitution of PE Hydro Generation, LLC for AE Energy Supply Company, LLC as the applicant in the pending application for a new license for the Millville Project No. 2343 is approved.

(E) Approval of the transfers are contingent upon: (1) transfer of title of the properties under the licenses, transfer of all project files including all dam safety related documents, and delivery of all license instruments to the Transferees which shall be subject to the terms and conditions of the licenses as though they were the original licensees; and (2) the Transferees acknowledging acceptance of this order and its terms and conditions by signing and returning the attached acceptance sheets. Within 60 days from the date of this order, the Transferees shall submit certified copies of all instruments of conveyance and the signed acceptance sheets.

(F) This order constitutes final agency action. Any party may file a request for rehearing of this order within 30 days from the date of its issuance, as provided in section 313(a) of the FPA, 16 U.S.C. section 825l (2012), and the Commission's regulations at 18 C.F.R. section 385.713 (2013). The filing of a request for rehearing does not operate as a stay of the effective date of this order, or of any other date specified in this order. The licensees' failure to file a request for rehearing shall constitute acceptance of this order.

Charles K. Cover, P.E.

Chief, Project Review Branch

Division of Hydropower Administration and Compliance

IN TESTIMONY of its acknowledgment of acceptance of all of the terms and conditions of this order, ____________________________ this _____ day of __________, 20___, has caused its corporate name to be signed hereto by ____________________________ _______________________________, its President, and its corporate seal to be affixed hereto and attested by ________________________________ its Secretary, pursuant to a resolution of its Board of Directors duly adopted on the _______ day of ___________, 20____, a certified copy of the record of which is attached hereto.

By______________________________

Attest:

Secretary

(Executed in triplicate)

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