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New York Poised to Close Last Coal-fire Power Plant

LCG, December 4, 2019--The last operating coal-fired power plant in New York is moving toward closure shortly. Last month, Somerset Operating Company, a subsidiary of Riesling Power LLC, submitted a request to the New York State Public Service Commission (NYSPSC) to waive the state's required, 180-day notice to close the Somerset Station, allowing the facility to be retired on February 15, 2020. Closure is contingent on approvals by both NYSPSC and the New York Independent System Operator (NYISO), which will evaluate if it will cause an adverse effect on grid reliability.

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Construction Commences on Enel’s Aurora Wind Farm in North Dakota

Enel Green Power North America, Inc. (“EGPNA”), the US renewable energy company of the Enel Group, has started construction of the 299-MW Aurora Wind Farm in North Dakota.

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Industry News

California QFs Still Hope for SoCal Ed Rescue

LCG, Sept. 18, 2001--Owners of California's qualifying facilities, non-utility power producers set up under federal mandate following the Arab oil embargo of the 1970s, were still hoping yesterday that the state legislature would somehow come up with a rescue package to keep Southern California Edison Co. out of bankruptcy.

SoCal Ed owes the QFs hundreds of millions of dollars, and bankruptcy usually means that creditors are forced to settle for a fraction of what is owed them.

The QFs include medium-sized conventional power plants, cogeneration facilities and some "renewable" sources of power. Many were built under the Public Utility Regulatory Policies Act of 1978, through which Congress sought to diversify the nation's sources of electric generation.

On the chances for a SoCal Ed bailout, Kelly Lloyd of Palm Springs-based wind power producer enXco said "We are holding out some faith on that, but based on comments by John Burton, I am not very optimistic."

Burton, a San Francisco Democrat who is president pro tem of the state Senate, said early Saturday on learning of Gov. Gray Davis' intention to call a special session of the state legislature to continue work on the rescue plan, "we should have killed this baby once and for all." Lloyd's pessimism seems well-founded.

In April, Davis and the utility agreed on an arrangement under which the state would buy SoCal Ed's transmission assets for $2.76 billion and the company would use the money to pay off most of its $3.9 billion in debt.

The deal needed legislative approval, and both Davis and SoCal Ed warned lawmakers not to change a thing, but changes were made.

When the state Senate passed legislation for a SoCal Ed bailout in July, the $2.76 billion transmission purchase had become a five-year option to buy the wires for $1.2 billion. The company would be allowed to issue up to $2.9 billion in revenue bonds to raise money to pay its creditors, but would have to service and repay the debt with revenues from only those of its customers having a peak demand of 500 kilowatts -- a very small fraction of its 11 million customers.

SoCal Ed and its parent holding company Edison International Inc. immediately dismissed the Senate bill as "unworkable," saying it placed a five-year cloud on its transmission assets and valued them at a bargain basement price.

The Senate bill went to the state Assembly, with warnings from the senators not to change a thing, but again changes were made.

When the Assembly passed legislation earlier this month, the value of the transmission assets had risen to $2.4 billion, but the purchase was still a five-year option. The $2.9 billion bond issue was still there, but the debt could be serviced by tapping revenues from a much broader customer base, though residential and small commercial customers were still shielded.

The measure then went back to the state Senate, where it died in committee Saturday morning when the legislature adjourned for the year. Davis immediately said he would call a special session to deal with the SoCal Ed rescue plan.

Jonathan Weisgall, a spokesman for geothermal power producer CalEnergy, said "There appears to be a number of personality issues and issues which go beyond electricity questions here," but did not amplify. He added "We have to give (SoCal Ed) some slack and we have to give the Senate some slack to deal with these issues."

By "slack" he meant continued forbearance on the matter of being paid. All it would take to force the utility into involuntary bankruptcy would be a suit by three of its many QF creditors.

Lloyd said his company had also committed for now to not push SCE into bankruptcy. He noted that if the rescue plan is eventually abandoned he believed it most likely that the utility would voluntarily file for Chapter 11 bankruptcy protection.

Which is what Pacific Gas & Electric Co. did in April, saving the state huge amounts of time and money which would have exceeded that spent on the smaller SoCal Ed.

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