The sale of the Valley Electric Association’s 230-kilovolt transmission system to GridLiance Holdco could go through in the near future, the cooperative announced in a news release.
President Donald Trump on Tuesday said he will nominate two members to the Federal Energy Regulatory Commission (FERC). After the nominees are approved by the Senate, they will be able to approve the sale of Valley Electric Association’s 230-kilovolt transmission system to Chicago-based GridLiance Holdco.
“This is great news for VEA and our members,” VEA CEO Thomas Husted said in a press release. “Once these appointments are confirmed, FERC will have a quorum and will be in the position to conduct important energy related business.”
VEA’s board of directors approved the sale of the 230-kilovolt transmission lines in December 2016 following more than two-thirds of the membership cooperative’s approval vote.
The sale would include 164 miles of high-voltage transmission lines VEA owns throughout Southern Nevada for an estimated $190 million. The transaction would net the cooperative almost 2.4 times the initial $82 million it invested in constructing the transmission lines, according to the press release.
The GridLiance’s purchase of the transmission assets requires a number of regulatory approvals by the Federal Energy Regulatory Commission before the transaction can close. The deal was put on hold in February when the cooperative announced that a nearly $200 million sale of its high-voltage system to GridLiance Holdco was delayed.
The commission lost its quorum when then-Chairman Norman Bay resigned in late January. Prior to that, the entity had been operating with only three commissioners out of usual five. Without a quorum, FERC cannot make final decisions on most issues, including the sale of part of VEA’s transmission system to GridLiance.
Trump has selected Neil Chatterjee of Kentucky and Robert F. Powelson of Pennsylvania as the Federal Energy Regulatory Commission’s nominees, according to the Valley Electric’s news release.
Officials said the system, which cost approximately $90 million to construct and took 20 years to complete, dramatically increased in value after VEA joined the California Independent System Operator (CAISO) in 2013.
Membership in the CAISO placed the system in the California market and under CAISO’s regional tariff. Joining CAISO optimized the 230-kilovolt transmission system economically and created enhanced opportunities for renewable generation in VEA’s service territory, according to a press release.
While building the system created reliability for VEA, the cost of debt service, operation, maintenance and depreciation has become high, officials said. The value of VEA’s high-voltage system, which is not part of the California service area has continued to increase, echoing the demand for renewable energy resources in California.
As part of the sales agreement, VEA will continue to operate, maintain and manage the 230-kilovolt transmission.
After the sale closes, VEA members will receive checks for $579 as their part of the sale’s premium followed by the largest patronage capital retirement in the cooperative’s 52-year history.
Contact reporter Daria Sokolova at firstname.lastname@example.org. On Twitter: @dariasokolova77