Energy Capital Partners’ plan to buy four power plants totaling 5.3 GW in the PJM Interconnection’s footprint could drive up capacity prices, partly by the possible diversion of the plants’ output to supply data centers, according to a protest filed Tuesday at the Federal Energy Regulatory Commission.
ECP, a private equity firm, and U.K.-based Javelin Global Commodities on Sept. 27 asked FERC to approve plans to buy a fleet of power plants and marketing entities from subsidiaries of Blackstone and ArcLight Energy Partners.
Under the deal, ECP and Javelin would buy the 480-MW gas-fired Darby power plant near Mount Sterling, Ohio; the 2,722-MW, coal-fired Gavin plant in Cheshire, Ohio; the 1,190-MW gas-fired plant in Lawrenceburg, Indiana; and the 875-MW gas-fired Waterford plant in Waterford, Ohio.
ECP is affiliated with 5,377 MW in PJM, according to the application.
“Allowing Energy Capital Partners to double its existing capacity within the PJM capacity risks creating increased opportunities for the exercise of market power and leaves customers more vulnerable to unjust and unreasonable rates,” Public Citizen, Private Equity Stakeholder Project and the Sierra Club said in their protest.
Further, the ECP and Javelin application doesn’t discuss a $50 billion partnership between ECP and private equity firm KKR to invest in and own power and transmission infrastructure to support artificial intelligence data centers, the groups said.
FERC should require ECP and Javelin to detail any relationship between buying the power plants and the AI deal with KKR, and whether ECP is considering affiliate agreements for behind-the-meter generation that might reduce the availability of capacity from the power plants into the PJM market, the groups said.
Meanwhile, ECP plans to retire the Gavin plant after the proposed deal is completed, according to an Oct. 10 report from Inside Climate News.
Private Equity Stakeholder Project and the Sierra Club have asked Blackstone and ECP to include Gavin’s retirement as a condition of the sale, but have not received a clear response, according to the protest.
“Given the above deficiencies of the application and potential for conflict if Javelin is slated to supply coal to Gavin, plans for retirement of the coal plant should be addressed by the applicants,” the groups said. “It remains our position that the plant should be retired.”
Javelin is one of the largest coal suppliers in the United States and includes power plants among its customers, according to the protest.
“The application reveals in a footnote that ‘Javelin may obtain contractual rights to the economics and management of Gavin,’ which appears to indicate that Javelin intends, among other things, to direct fuel supply decisions for the Gavin facility,” the groups said. “Javelin’s role as one of the largest physical coal traders in the United States should raise vertical competition concerns.”
