Competitive Power Ventures, Inc. - Energy Highway

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CPV VALLEY ENERGY CENTER 3.5 Reduce constraints on the flow of electricity to, and within, the downstate area, and expand the diversity of power generation sources supplying downstate The transmission system upgrades associated with CPV Valley reduces constraints in the Leeds Hurley transmission corridor, and therefore, makes the additional 680 MW of capacity from the Project available to the downstate region. This additional 680 MW of clean and highly efficient generation can reduce the reliance on other downstate facilities, such as peakers or oil fired units, during critical periods of the year. In addition, the Transmission Enhanced Option, in conjunction with the construction of CPV Valley, is capable of providing approximately 450 MW of incremental transmission capability on the UPNY-SENY interface. This additional transmission transfer capability could facilitate the flow of existing bottled upstate natural gas and renewable generation sources to the downstate area. This increased flow from these other upstate generation sources expands the diversity of generation supply available to the downstate area. 3.6 Increase efficiency of power generation, particularly in densely populated urban areas As a state-of-the-art combined cycle facility, Valley will be cleaner and more efficient than existing generation in New York’s fleet. The addition of more efficient generation will increase New York’s overall system efficiency, or in generic terms, reduce the amount of fuel used to produce the same amount of electricity. Cleaner and more efficient generation will tend to displace older, less efficient generation units. For example, Valley will use approximately 7,000 Btu’s of fuel to produce 1 kWh of electricity (under full load conditions without duct firing), whereas it is expected that on average the cost of electricity across the densely populated lower Hudson Valley is based on using approximately 11,300 Btu’s of fuel to produce 1 kWh of electricity during an on-peak period. The amount of fuel to make electricity is referred to as the “heat rate”. With the addition of CPV Valley as a deliverable generation resource, New York’s cost of electricity per fuel cost improves by approximately 1.6% in 2015 across the entire densely populated Zones G, H and I according to the PA Consulting analysis. 3.7 Create jobs and opportunities for New Yorkers CPV Valley will create over 500 direct new construction jobs at the peak of construction. In addition, the operation of the facility will create 24 new permanent high-paying jobs. CPV engaged an independent third party to evaluate the economic impacts of CPV Valley. Based on the results of socio-economic analyses, the 29 month construction period will create approximately 1,889 jobs, including direct, indirect and induced jobs. It is estimated that throughout the operating years CPV Valley will create 131 jobs, including direct, indirect and induced. In addition, the Project will provide a boost to the local economy through the direct and indirect purchase of goods and services to support the construction and operation of the Project. This increased activity will support the local business and create additional jobs. Detail of the job creation is outlined in Section 12.2 of the Additional Information section. 3.8 Apply advanced technologies that benefit system performance and operations CPV Valley’s Transmission Enhanced Option utilizes series compensation technology to maximize the performance and capability of the existing transmission system. This is a no regrets, low cost opportunity for New York to optimize the performance and operation of New York’s existing transmission infrastructure. This option is can be placed in service sooner than other transmission upgrades that require the construction of new lines. This option would also complement and be compatible with future larger transmission reinforcements. 3.9 Adhere to market rules and procedures, and make recommendation for improvements as appropriate CPV will adhere to market rules and procedures and would be entirely consistent with FERC, NY State and NYISO laws, rules, regulations and procedures. CPV management’s development of the Athens New York Energy Highway 7 | P age
CPV VALLEY ENERGY CENTER Generation facility and current management of 1,080MW in New York’s electric and gas markets demonstrates its understanding of the market rules and procedures. CPV Valley’s successful navigation of the NYISO interconnection process from the NYISO’s Feasibility Study through its Class Year Facilities Study process is further demonstration of CPV’s experience and ability to adhere to New York market rules and procedures. In the course of completing the System Reliability and Impact Study (SRIS) process, CPV Valley impacts have been quantified and were determined to be minimal. CPV Valley’s completion of the Class Year Facilities Study determined the Project would be deliverable with relatively minor upgrades on the system. Finally, CPV’s Valley Energy Center has successfully navigated New York’s SEQRA process. Understanding and adhering to state procedures was fundamental to CPV completing the SEQRA process for the CPV Valley Energy Center in May of 2012. 4.0 Financial 4.1 General Financial Structure The Project is owned by CPV Valley Energy Center, LLC, which is an indirect wholly owned subsidiary of Competitive Power Ventures Holdings, LLC (CPVH). CPV is majority owned by Warburg Pincus, with participation by CPV management and other individual accredited investors. Since the late 1980's, Warburg Pincus has invested more than $6 billion in energy companies around the world and has backed CPVH for over a decade. 4.2 Financing Structures CPV Valley’s finance plan addresses the Project’s three distinct periods of activity: development, construction, and operations. During development, CPV Valley’s sponsors will contribute the required equity to fund 100% of the capital needs of the Project. Raising debt financing for the CPV Valley Energy Center is predicated on a solution beyond that currently offered in the NYISO market. CPV Valley is flexible and willing to work with the state of New York in developing a structure that provides the greatest value to the New York ratepayers. However, in order to effectively raise the private capital to start construction of the CPV Valley Energy Center, CPV Valley would require some form of surety of future revenues in the form of a long-term contract. Upon commencement of construction, which is expected coincident with the financial closing of credit facilities for CPV Valley, construction funding will be sourced through a combination of nonrecourse credit facilities provided by third party lenders and equity contributed by Project sponsors. The debt funding during construction is projected to be in the form of either a commercial bank miniperm construction loan converting to a term loan upon the Commercial Operations Date (COD), or a long-term construction/term financing executed in the institutional/private placement markets. The commercial bank market and the institutional/private placement markets each represent viable financing alternatives and the competitiveness of each will continually be assessed as the Project nears financial closing. The foregoing provided a summary of potential financing structures based on assumptions regarding the surety of the revenue stream. The ultimate contractual structure of the revenue stream and future market conditions will shape the actual financial structure. However, CPV has successfully put into construction multiple clean generation projects by raising over $1 billion of private financing in the past 12 months and feels confident that with an effective long-term contract it will be possible to raise the necessary financing to construct CPV Valley. 5.0 Permits and Approval Process CPV Valley has achieved one of the most significant milestones in the New York SEQRA approval process. CPV Valley’s SEQRA Findings Statement was adopted by the lead agency in May of 2012. Since New York law precludes state agencies from taking action until SEQRA is complete, other project New York Energy Highway 8 | P age
Page 1 and 2: THE CPV VALLEY ENERGY CENTER
Page 3 and 4: Table of Contents 5.4 Potential Dec
Page 5 and 6: CPV VALLEY ENERGY CENTER B. REQUIRE
Page 7 and 8: CPV VALLEY ENERGY CENTER substation
Page 9: CPV VALLEY ENERGY CENTER The ratepa
Page 13 and 14: 2011 Facilities Study, the Project
Page 15 and 16: CPV VALLEY ENERGY CENTER Marcy Sout
Page 17 and 18: CPV VALLEY ENERGY CENTER report pre
Page 19 and 20: CPV VALLEY ENERGY CENTER The Final
Page 21 and 22: CPV VALLEY ENERGY CENTER Financial
Page 23 and 24: CPV VALLEY ENERGY CENTER settings.
Page 25 and 26: Appendix A Project Description The
Page 27 and 28: Appendix B CPV Valley Energy Center
Page 29 and 30: Appendix B CPV Valley - NYISO Zone
Page 31 and 32: ID Task Name 1 CPV Valley Energy Ce
Page 33 and 34: Appendix E Point of Electrical Inte
Page 35 and 36: TABLE OF CONTENTS ACRONYMS 1.0 EXEC
Page 37 and 38: 4.0 CULTURAL RESOURCES.............
Page 39 and 40: 7.4.1.3 Secondary Economic Impact D
Page 41 and 42: 9.2.5.3 Availability and Certificat
Page 43 and 44: 11.3.5.3 Water/Wastewater Interconn
Page 45 and 46: 12.6.7 Oil and Chemical Use during
Page 47 and 48: 16.0 COMMUNITY CHARACTER ..........
Page 49 and 50: 19.8.1.1 “G” Class Turbines ...
Page 51 and 52: Table 7-17 Environmental Justice Da
Page 53 and 54: Table 12-5E Estimated Average Chang
Page 55 and 56: List of Figures Figure 1-1 Figure 1
Page 57 and 58: Figure 8-9 Figure 8-10 Figure 8-11
Page 59 and 60: 10.0 NOISE 10-A CPV Valley Energy C
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FINAL ENVIRONMENTAL IMPACT STATEMEN
Page 63 and 64:
TABLES Table 1-1 SEQRA Milestones .
Page 65:
Appendix G Letters of Support New Y
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WHEREAS, the Project has adhered to
Page 77 and 78:
Board of Directors Resolution #0512
Page 81 and 82:
New York State Laborers'-Employers'
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05/21/2012 16:56 4012727456 LIUNA R
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5151 San Felipe, Suite 2500 Houston
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