By Hudson Sangree
Despite protests from a number of cities, FERC last week approved the sale of the Trans Bay Cable, a 400-MW line that runs for 53 miles under San Francisco Bay, to NextEra Energy Transmission (EC19-36).
“Based on the record in this proceeding, we find that the proposed transaction will not have an adverse effect on rates,” FERC wrote.
The cable’s current owner is Trans Bay Cable LLC, a portfolio company of SteelRiver Infrastructure Partners of Sausalito, Calif. The Trans Bay Cable provides electric transmission between two substations owned by Pacific Gas and Electric and is under CAISO control.
Trans Bay and NextEra asked FERC to approve the deal in December. The companies did not publicly disclose the purchase price, but news reports put it at $1 billion.
The line’s current rates are fixed under a settlement agreement that expires next year. In its comments to FERC, the Northern California Power Agency said NextEra should not be able to recover acquisition costs after that settlement rate expires.
Six cities in California — including Anaheim, Riverside and Pasadena — said NextEra’s application failed to state how the transaction could affect rates. The city of San Francisco requested FERC to require more information from the applicants regarding acquisition costs “in order to ensure that no unlawful acquisition premium will be included in rates.”
Another intervenor, the California Municipal Utilities Association, said “that applicants have chosen to withhold key financial data from parties in this proceeding and that, without that information, parties are forced to rely upon public news reporting regarding the terms of the proposed transaction,” FERC wrote. “California Municipal Utilities Association states that, given that the applicants have chosen to request confidential treatment of financial data, it is difficult to test their assertion that the proposed transaction will have no adverse effect on rates.”
NextEra said it has no intention of trying to recover acquisition costs from CAISO customers via rate increases, and FERC said that even if NextEra did so, it would face a difficult test under Section 205 of the Federal Power Act to show the “the acquisition provides specific, measurable and substantial benefits to ratepayers, consistent with commission precedent.”
With regard to the confidentiality concerns, FERC said intervenors can request copies of confidentially filed materials, but that so far, none has done so.