1 United States of America Before The

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1 United States of America Before The UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Mesquite Solar 2, LLC ) Docket No. ER16-_____-000 PETITION OF MESQUITE SOLAR 2, LLC FOR ORDER ACCEPTING MARKET-BASED RATE TARIFF FOR FILING AND GRANTING WAIVERS AND BLANKET APPROVALS AND REQUEST FOR EXPEDITED ACTION Pursuant to section 205 of the Federal Power Act (FPA),1 Rule 205 of the Rules of Practice and Procedure of the Federal Energy Regulatory Commission (FERC or Commission),2 and Part 35 of the Commission’s regulations under the FPA,3 Mesquite Solar 2, LLC (Applicant) hereby petitions the Commission for: (1) acceptance of its Market-Based Rate Tariff with an effective date of May 20, 2016; (2) waiver of certain Commission regulations under the FPA; and (3) the granting of certain blanket approvals. As described herein, Applicant respectfully requests issuance of an order granting the above requests no later than May 20, 2016. As discussed in Section IV of this application, Applicant also requests a blanket authorization under FPA § 204 and Part 34 of the Commission’s regulations to issue securities and assume liabilities. Applicant requests that the Commission issue a notice concerning the request for such blanket authorization under FPA § 204 and Part 34 of the Commission’s regulations at the same time, and with the same comment period, as that issued for the notice of 1 16 U.S.C. § 824d. 2 18 C.F.R. § 385.205. 3 18 C.F.R. Part 35. 1 Applicant’s FPA § 205 application for market-based rate authorization.4 Applicant further requests that the Commission grant its request for blanket authorization to issue securities and assume liabilities (without imposing any additional notice period) in the same order and at the same time it issues the order granting Applicant’s market-based rate authority so that such blanket authorization will be fully effective at the time of the order.5 I. COMMUNICATIONS Communications and correspondence concerning this filing should be directed to the following: Daniel A. King Adam Wenner Sempra U.S. Gas & Power, LLC Orrick, Herrington & Sutcliffe LLP 488 8th Ave. HQ12S1 Orrick Building at Columbia Center San Diego, CA 92101 1152 15th Street NW (619) 696-4350 Washington, DC 20005-1706 [email protected] (202) 339-8515 [email protected] II. DESCRIPTION OF APPLICANT AND RELEVANT AFFILIATES A. Applicant Applicant is a wholly-owned direct subsidiary of Sempra Solar Holdings, LLC (Solar Holdings), which in turn is a wholly-owned direct subsidiary of Sempra Renewables, LLC 4 See, e.g., Notice Announcing Combined Notice of Initial Market-Based Rate Authorization Filings, 73 Fed. Reg. 19495 (Apr. 10, 2008); Saracen Energy Partners, LP, Docket No. ER08-901-000 “Supplemental Notice That Initial Market-Based Rate Filing Includes Request For Blanket Section 204 Authorization” (May 22, 2008). 5 See Saracen Energy Partners, LP, Docket No. ER08-901-000 (June 12, 2008) (unpublished letter order granting blanket authorization under Part 34 of the Commission’s regulations that was fully effective at the time the order granting market-based rate authority was issued and did not impose any additional notice period for the FPA § 204 and Part 34 blanket authority because notice of that request was issued contemporaneously with market-based rate request). 2 (Sempra Renewables),6 which in turn is a wholly-owned direct subsidiary of Sempra Global, which in turn is a wholly-owned direct subsidiary of Sempra Energy.7 Applicant is constructing and will own and operate a solar photovoltaic (PV) electric generation facility currently under construction in Maricopa County, Arizona, with a nameplate capacity of 100.82 MW (Solar Facility) located in the CAISO balancing authority area (BAA).8 Applicant will sell the entire output of the Solar Facility pursuant to a 20-year power purchase agreement (PPA)9 with the Southern California Edison Company,10 which is unaffiliated with Applicant. 6 Applicant anticipates that its current upstream ownership will change as a result of a future investor acquiring indirect, passive tax equity interests in Applicant (Tax Equity Transaction), which interests will provide the investor with limited rights consistent with the consent rights held by the passive tax equity investors in AES Creative Resources, L.P. et al., 129 FERC ¶ 61,239 (2009). Any such changes in the upstream ownership of Applicant will be undertaken consistent with applicable requirements pursuant to, among other things, Section 203 of the FPA and Section 35.42 of the Commission’s regulations. Prior to the closing of the Tax Equity Transaction, two additional entities, each of which are wholly-owned by Sempra Energy, will be interposed between Applicant and Solar Holdings, such that Applicant will be a wholly-owned direct subsidiary of CMMS Solar Portfolio Holdings, LLC, which in turn is a wholly-owned direct subsidiary of CMMS Equity Holdings, LLC, which in turn is a wholly-owned direct subsidiary of Sempra Renewables. For the Commission’s convenience, organizational charts depicting Applicant’s above-described current and pre-Tax Equity Transaction ownership structures are included as Attachments A-1 and A-2 to this application. 7 Sempra Energy is a publicly-traded public utility holding company based in San Diego, California, that provides, through various subsidiaries and affiliates, a wide spectrum of electric, natural gas, and energy-related products and services to a diverse range of customers. Sempra Energy also wholly owns Southern California Gas Company (SoCalGas) and San Diego Gas & Electric Company (SDG&E). SoCalGas, a natural gas distribution company and Hinshaw pipeline regulated by the California Public Utilities Commission (CPUC), serves customers through most of southern California and part of central California. SDG&E is a public utility with a franchised service territory that provides electric and natural gas service in San Diego County and southern Orange County, California. SDG&E owns transmission facilities and is a Participating Transmission Owner in the market operated by the California Independent System Operator Corporation (CAISO), which has an open access transmission tariff (OATT) on file with the Commission. Transmission service over SDG&E’s transmission facilities is provided under the terms and conditions of the CAISO OATT. 8 See California Independent System Operator Corp., Docket No. ER15-2499-000 (Letter Order dated (Oct. 9, 2015)(accepting CAISO large generator interconnection agreement for filing). 9 The precise expiration date of the PPA is unknown at this time. Within 30 days of the expiration date becoming known, Applicant will submit an informational filing in this docket to inform the Commission of the date. See Refinements to Policies and Procedures for Market-Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities, Order No. 816, 153 FERC ¶ 61,065 (2015) at P 44. 10 CPUC Energy Division Resolution E-4738 (issued Nov. 6, 2015). 3 The Solar Facility also consists of certain interconnection facilities that are to be shared with adjacent generators as tenants in common. Applicant is party to the Amended and Restated Co-Tenancy and Shared Facilities Agreement (Restated Inter-Phase SFA), which governs the terms and conditions under which the parties will own, utilize, operate, and maintain their respective interests in a 34.5/230kV substation and a 230kV generation-tie line approximately four (4) miles in length (together, the Mesquite Solar Generator-tie Facilities).11 In addition, Applicant is party to the Assignment, Co-Tenancy and Shared Facilities Agreement (Revised Inter-Company SFA), which governs the terms and conditions under which the parties will own, utilize, operate, and maintain their respective interests in certain additional shared generator interconnection facilities (Shared Switchyard Facilities).12 Pursuant to the Restated Inter-Phase SFA and the Revised Inter-Company SFA, Applicant’s pro rata interests in the Mesquite Solar Generator-tie Facilities and the Shared Switchyard Facilities are sized to accommodate the output of the Solar Facility and will be utilized by Applicant solely to connect its Solar Facility to the grid. B. Relevant Generation Affiliates In addition to SDG&E, Applicant is affiliated with the following entities that own or control generation in the CAISO BAA, Applicant’s relevant market:13 11 See Mesquite Solar 1, LLC, et al., Docket No. ER16-525-000, et al. (Letter Order dated Feb. 9, 2016)(accepting Restated Inter-Phase SFA for filing). 12 The Shared Switchyard Facilities consist of the following components, each with associated property, fixtures, equipment, and facilities: (i) a 230kV bus; (ii) two 230kV lines each terminating at individual three-phase autotransformer banks; (iii) two 230/500kV three-phase autotransformer banks; (iv) two 500kV lines approximately 0.3 miles in length connecting each autotransformer bank to the Hassayampa switchyard (Hassayampa); and (iv) interconnection facilities in bays 5 and 8 in Hassayampa. See Mesquite Solar 1, LLC, et al., Docket No. ER16-290- 000, et al. (Letter Order dated Dec. 8, 2015)(accepting Revised Inter-Company SFA for filing). 13 Concurrently with this application, Copper Mountain Solar 4, LLC (CMS4) and Mesquite Solar 3, LLC (MS3) – each a wholly-owned indirect subsidiary of Sempra Energy – are also submitting separate applications pursuant to Part 35 of the Commission’s regulations for market-based rate authority and related waivers in 4 Alpaugh North, LLC, which owns a 20 MW (nameplate) solar PV facility; Alpaugh 50, LLC, which owns a 50 MW (nameplate) solar PV facility; CED White River Solar, LLC, which owns a 20 MW (nameplate) solar PV facility; CED Corcoran Solar, LLC, which owns a 20 MW (nameplate) solar PV facility; Copper Mountain Solar 1, LLC, which owns a 58.5 MW (nameplate) solar PV facility; Copper Mountain Solar 2, LLC, which owns a 155.3 MW (nameplate) solar PV facility; Energia Sierra Juarez U.S., LLC, which sells the output from the 155.1 MW (nameplate) Energía Sierra Juarez, S.
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