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230kV Sale Delayed

PAHRUMP, Nev. (Feb. 16, 2017) – VEA has entered into a binding Asset Purchase Agreement (“Agreement”) to sell its 230 kV transmission assets to GridLiance West Transco LLC (“GridLiance”). The sale has been approved by the California Independent System Operator (“CAISO”) – the entity that manages VEA’s regional transmission market, as well as the other transmission owners in the CAISO. Unfortunately, the closing of the sale will likely be delayed at least a month, perhaps more, from the originally planned March 1st closing date due to political change in Washington, DC. 

GridLiance’s purchase of the transmission assets requires a number of regulatory approvals by the Federal Energy Regulatory Commission (“FERC”). VEA, GridLiance, and CAISO were required to make nearly a dozen filings with FERC in order to close the transaction. Most of these filings only require a letter order from FERC Staff, and VEA and CAISO have already received a number of these staff letter orders.

However, by law only the Commission may approve GridLiance’s request to purchase the assets – and that approval must come before closing. Immediately after the Trump administration took power, one of the FERC Commissioners resigned. FERC had already been operating with only three Commissioners, rather than the usual five, because political gridlock prevented Senate confirmation of Commissioners to fill existing vacancies in 2016. When the third Commissioner resigned effective February 3, with only a week’s advance notice, FERC lost its quorum. As a result, until President Trump appoints, and the Senate confirms at least one additional Commissioner, the necessary order to approve the purchase cannot be issued. The FERC Chair has assured the industry in public comments that staff is continuing to work on all affected filings to position FERC to act quickly as soon as the new Commissioner(s) are in place.  

A second FERC action making GridLiance’s new rate effective is also needed to close. Staff can issue this order. As is standard practice, a number of parties have intervened in the case (which is a separate case from GridLiance’s request for permission to make the purchase), arguing that the requested rate is too high. FERC typically accepts the rate subject to refund, letting the parties litigate afterward what the rate should be. Importantly, closing the transmission sale is NOT contingent on GridLiance getting the rate filed, only on FERC accepting that rate and starting the process. Staff could delay closing by “suspending” effectiveness for the maximum period allowed by law – five months – but maximum suspensions are rare and not expected in this case.

As a result, closing the transmission sale depends first and foremost on the administration appointing at least one FERC Commissioner and the Senate confirming the nominee, so that the agency can get back to work. VEA does not know how long it will take to get final approval and close after a FERC Commissioner is appointed, but there is reason to hope that the process will move quickly at that time.

In order to address VEA members' questions, Husted will conduct a "Coffee with Tom" forum from 9 a.m. until 4 p.m., Tuesday, Feb. 21 at the Valley Conference Center. Members are welcome to stop by any time during those hours. "We know how important this sale is to our members, so we want to address all their questions," said Husted

 

About Valley Electric Association, Inc.

Valley Electric Association, Inc. (VEA) is a member-owned nonprofit electric utility headquartered in Pahrump, Nev. While VEA started as a small rural electric utility in 1965, the company now provides electric service to more than 45,000 people within a vast 6,800-square-mile service area located primarily along the California-Nevada border, with the majority in Nevada. Valley Communications Association (VCA), a wholly owned subsidiary of VEA, began proving high-speed communications to our member-owners in the spring of 2016. VEA’s service area starts in Sandy Valley, southwest of Las Vegas, and extends north for more than 250 miles to Fish Lake Valley. For more information about VEA, please visit www.vea.coop.



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