Valley Electric Association’s sale of its 230-kilovolt transmission system to Chicago-based GridLiance Holdco for just more than $200 million remains on hold, as a path to federal regulatory approval has been stymied since early 2017.
The Federal Energy Regulatory Commission, which must approve the sale of VEA’s 164-mile, high-voltage transmission lines in Southern Nevada to GridLiance, is awaiting Congress to confirm at least two more of President Donald Trump’s nominees for its five-person commission to move forward on the sale.
In February, the commission was reduced to two members, where three are required to approve the sale. In June, the commission lost another member, leaving an even larger deficit.
“Once the U.S. Senate signs off on at least two of the nominees, FERC will take up the issue of the transmission lines,” VEA said in a news release in July.
President Donald Trump, who chooses the nominees, has named three members to date. In mid-July, he tapped attorney Kevin McIntyre as chairman of FERC. McIntyre is co-head of Washington D.C.-based Jones Day law firm’s global energy practice.
In May, Trump chose two nominees for FERC: Neil Chatterjee, a senior energy advisor to Senate Majority Leader Mitch McConnell, R-Kentucky; and Robert Powelson, former chairman of the Pennsylvania Public Utility Commission.
With the resignation of former chairman Norman Bay in February, the commission was left without a quorum.
At that time, FERC was left with acting chairman Cheryl LaFleur and Colette Honorable, whose five-year term ended in June, making it impossible for the sale to close.
VEA is one of several companies trying to close on deals across the nation. According to a report by Bloomberg, over $50 billion worth of project applications are pending approval by the commission.
On top of not being able to close on the deal with VEA, a spokeswoman for GridLiance said the company was also waiting on pending approval for a purchase in Nixa, Missouri.
Action by Congress has not been at a total standstill.
Chatterjee and Powelson were approved by the Senate Energy and Natural Resources Committee on June 6. Both are awaiting a full Senate vote.
The Senate is scheduled to go on recess on July 31 to Sept. 4. However, Trump has urged members to not go on break and continue working on the health care bill.
Project effort
Once the sale closes, the cooperative will net more than double its initial investment of $82 million in the transmission lines.
The cooperative will maintain and manage the lines, as part of the agreement with GridLiance.
The sale of the transmission line was approved by more than two-thirds of the cooperative’s 17,500 members in 2016, which was pegged to close by March.
In February, VEA sent out a news release saying the sale was delayed.
In that release, it was stated that the sale of the transmission line to GridLiance was approved by California Independent System Operators (CAISO), an entity that manages VEA’s regional transmission market, according to the news release.
Following that approval, the sale was sent to FERC for final consideration, where it now sits.
A second request setting GridLiance’s rates was also submitted. Approval on this doesn’t require action by the commission; staff can typically handle the transaction.
“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,” a news release by VEA in February stated. “FERC typically accepts the rate subject to refund, letting the parties litigate afterward what the rate should be.”
The cooperative voted to reduce rates by 9.9 percent in anticipation of the sale, according to a news release in 2016.
That new rate took effect on Jan. 1, 2017.
Upon the deal’s closure, $17.5 million of the proceeds are set to go to members, giving $579 to each VEA member when the sale is complete.
“Members are frustrated by the delay, which could not have been anticipated,” said Michael Hengel, executive vice president of corporate communications at VEA. “We cannot find any period in the 97-year history of the commission where a lack of a quorum has shut down the day-to-day business of FERC for such an extended period.”
Contact reporter Jeffrey Meehan at jmeehan@pvtimes.com. On Twitter: @pvtimes