FERC okays sale of Kay Wind project by Apex to Southern Power

The 314-MW Kay Wind project is due for operation later this year

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The Federal Energy Regulatory Commission on March 27 approved an ownership change for Kay Wind LLC, which has a 314-MW wind project in Oklahoma.

On Dec. 29, 2014, Kay Wind and Southern Power filed an application requesting commission authorization for a transaction under which Southern Power, or an entity controlled directly or indirectly by Southern Power, will acquire 100% of the membership interests in Kay Wind from a wholly-owned subsidiary of Apex Clean Energy Holdings LLC.

Kay Wind is engaged in the development and construction of a 314-MW wind facility located in Oklahoma within the Southwest Power Pool (SPP) market.  Kay Wind projects that the facility will commence commercial operations in the third or fourth quarter of 2015. The facility will interconnect with the transmission system owned by Oklahoma Gas & Electric (OG&E) and operated by SPP. Kay Wind has pending before the commission an application for initial market-based rate tariff authority, and it has filed a notice of self-certification as an exempt wholesale generator.

Kay Wind has entered into long-term power purchase agreements with Westar Energy and the Grand River Dam Authority under which Kay Wind will sell all of the facility’s electrical output.

Kay Wind is an indirect wholly-owned subsidiary of Apex Holdings, which has principal place of business in Charlottesville, Virginia. A wholly-owned subsidiary of Apex Holdings will sell to Southern Power (or an entity directly or indirectly controlled by Southern Power) 100% of the membership interests in Kay Wind. Apex Holdings, through its subsidiaries, develops, constructs, owns and operates utility-scale renewable energy facilities and assets across the United States. Apex Holdings is a privately-held company, whose management and control is vested exclusively and completely in the manager, Apex Clean Energy Inc.

Southern Power is a public utility and has a market-based rate wholesale power sales tariff on file with the commission. It is a wholly-owned subsidiary of Southern Co. (NYSE: SO). Neither Southern Power nor any of its affiliates own or control any electric transmission or distribution facilities in the SPP Integrated Marketplace. Neither Southern Power nor any of its affiliates own or control any inputs to generation in the SPP Integrated Marketplace.

Applicants stated that the Southern Companies have entered into long-term firm purchases of power from approximately 404 MW of remote variable energy resources located in the SPP footprint. The Southern Companies entered into these remote purchases from these remote resources in SPP for the purpose of meeting retail service obligations within the franchised service territory of the Southern Companies. In order to assure deliverability for service to Southern Companies’ network loads in the Southern balancing authority area (Southern BAA) and to assure eligibility for Network Resource designation, the Southern Companies have entered into long-term firm point-to-point transmission service agreements with SPP and with Entergy, and entered into arrangements to have these resources pseudo-tied from SPP, through MISO South (Entergy) and into the Southern BAA.

In a separate March 27 order, FERC granted Kay Wind the authority to make wholesale sales of electric energy, capacity, and ancillary services at market-based rates.

Barry Cassell
About the Author

Barry Cassell

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 26 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.

Barry can be reached at barryc@pennwell.com.

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