Members to receive $579 cash premium; other proceeds to be reinvested
Pahrump, NV (Sept. 20, 2017) — Valley Electric Association, Inc., (VEA) today announced the completion of the sale of more than 160 miles of high-voltage transmission lines in Clark and Nye Counties to GridLiance Holdco, an independent transmission company based in Dallas. The Federal Energy Regulatory Commission approved the sale on Aug. 17.
The 230-kilovolt transmission system was built over a 20-year period beginning in the mid-1990s to provide power and reliability for VEA member-owners.
The sale price represents a substantial premium and will provide meaningful benefits to the Cooperative and its membership. A portion of the proceeds from the sale will be reinvested into fiber-optic broadband services and utility infrastructure throughout VEA’s rural service area. Additionally, each VEA member-owner active on Oct. 14, 2016, received a $579 premium check earlier this week. Patronage capital checks to members will soon follow. In all, approximately $18 million will be paid to members in cash, which represents an immediate economic infusion into rural Nevada.
Al Parker, a VEA member who serves as chair of the Cooperative’s volunteer advisory group’s Finance Committee, said the checks couldn’t come at a better time.
“The timing of this is fantastic because you’re coming into the holiday season,” he said. “For a lot of our owner-members, it’s an unexpected windfall that they never would have imagined a few years ago in our community. It’s great for them. It’s great for the community.”
Frank Bonesteel, a president of the Executive Committee of the Cooperative’s Ambassador Program, said the vast majority of member-owners voted to approve the sale, and were pleased to get their checks.
“The following morning, the houses were rocking. Everybody seemed to be happy,” he said.
Under terms of the sale, GridLiance will contract with VEA long-term to operate, maintain and manage the system, preserving local jobs and ensuring that the high-voltage transmission system will continue to operate seamlessly. The acquisition will not affect the remaining transmission and distribution facilities owned by VEA.
“What today marks is not just a partnership, not just a sale of transmission facilities, but a continued evolution of the infrastructure that drives Nevada, specifically our area in Southern Nevada,” said VEA CEO Thomas H. Husted. “This sale marks a pivotal moment in the history of our cooperative. The partnership with GridLiance will provide benefits to our members well into the future — including cash benefits from the sale, many years of rate stability, further investment in high-speed communications for their benefit, and community investment on a scale unlike any other in Pahrump’s history. We built this high-voltage system to provide reliability for our members, and that will continue — along with the opportunity to service and maintain the 230-kV system for decades.”
“This is a monumental and a fantastic opportunity for GridLiance, as well” said Calvin Crowder, president and CEO, GridLiance. “We’re really excited to close on this transaction and not only to put a transaction to a close but also to put a partnership to a birth. This partnership has been blossoming over the time we’ve worked together with Valley. It has been tremendous to see the teams come together. And we’ve faced a few battles we’ve had to fight and a few hills that we had to climb, but we got it done, and we have closed on this transaction, and now we’re ready to move forward.”
A member-owned nonprofit electric utility headquartered in Pahrump, Nevada, Valley Electric Association completed construction of the circular loop of transmission facilities connecting Clark and Nye Counties in 2012. Soon afterward, VEA joined the California Independent System Operator Corporation (CAISO) as the only non-California member to be able to participate in CAISO’s wholesale marketplace and participate in opportunities for renewable energy generation and transmission from VEA’s service territory.
“Joining CAISO was a game changer for us as a rural electric cooperative,” said Husted. “The completion of mandatory redundant transmission capability and the partnership with CAISO created incredible value for our energy infrastructure, and the sale will not only financially benefit our member-owners, but it will also allow us to reinvest in our expanding energy market, but will also provide resources to expand fiber optics, and high-speed communications systems throughout rural Nevada.”
The line purchase represents GridLiance’s first asset in CAISO, Crowder said, though he hopes not its last. The asset is key in GridLiance’s next project, Nevada West Connect. Crowder said the project could be an opportunity to bring a stronger interconnection between the CAISO, “which has great renewable demand and renewable desire, with Nevada which has great renewable resources. Nevada West Connect is a transmission project that will allow those resources to flow from Nevada into California and will also bring jobs and growth into Nevada and realize the benefit that those renewables have. We’re really excited about that.”
GridLiance Senior Vice President over West Utilities Justin M. Campbell said Nevada has a wealth of renewable resources — solar, wind, geothermal — and energy storage projects that could be tapped “as California seeks to reduce greenhouse gas emissions as it looks forward to 50-percent renewable portfolio.”
Proceeds from the sale will be used by VEA to pay down debt and reduce operating costs, create long-term utility rate stability while also providing development capital, in addition to the approximately $18 million distribution to VEA’s owner-members.
“It’s nice always to have some extra cash, and never too difficult to figure out what you might do with it,” Parker said of the money distributed to member-owners. He added that he knows it’s extra cash to many, but vital to plenty.
“We’re already receiving thank-you cards,” Husted said adding that member-owners are letting him know how the money is being spent, with many citing basic needs.
Husted said VEA also hopes to put some of the proceeds toward a community center.
“We’re working on it right now,” he said. “I suspect a year from now we’ll be breaking ground.”
GridLiance is backed by Blackstone Energy Partners, an affiliate of Blackstone (NYSE:BX).
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.
GridLiance is an independent electric transmission company. Formed in 2014 by industry veterans, GridLiance is a portfolio of the Blackstone Group, a leading energy infrastructure investor. GridLiance’s business model is to partner with municipalities, public power agencies and electric cooperatives (Public Power), to increase system reliability and lower costs. GridLiance’s differentiated operating model provides its Public Power partners with new opportunities to invest in regulated transmission projects or rely on GridLiance to plan and construct transmission for their benefit. GridLiance currently operates over 575 miles of transmission lines and related substation facilities in Nevada and Oklahoma. The company has long-term partnerships with Public Power entities operating in Missouri, Oklahoma, Nevada, Texas, and Kansas, and is negotiating new arrangements with utilities in several other states. For more information about GridLiance, visit www.GridLiance.com.
Krissy Posey, Director of Communications
Valley Electric Association
Michael Hengel, Executive Vice President of Corporate Communications