Tenaska seeks full control of Texas gas-fired plant

Tenaska Energy, Inc, is seeking to buy out Osaka Gas Co’s 40% stake in an 845 MW natural gas-fired generation facility in Texas, Federal Energy Regulatory Commission (FERC) filings show.

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Approval of the transaction, alongside a separate deal with Diamond Generation Corporation (DGC) currently before the commission, would boost Tenaska’s interest in the Rusk County facility from a roughly 32% minority stake to full control.

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The deal would transfer Osaka’s 0.4% general partnership stake in Tenaska Gateway Partners, Ltd to Tenaska VII Partners, and its 39.6% limited partnership stake to Tenaska Gateway Investments, ending the Japan-based corporation’s affiliation with the project.

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Tenaska has separately requested FERC approval to purchase DGC’s 28% ownership interest in Tenaska Gateway Partners, Ltd, as previously reported.

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Whitehall & Company served as sole advisor to both Osaka and DGC on the deal, as reported by SparkSpread in May.

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Tenaska is requesting approval of its deal with Osaka by 18 February. 

The Gateway facility sits at the intersection of the Southwest Power Pool (SPP) market and the Electric Reliability Council of Texas (ERCOT) grid and is interconnected with both transmission networks.

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The plant’s output is fully committed to Shell Energy North America LP in the SPP market through December 2023, under a 22.5-year long-term power purchase agreement.

The transaction does not raise horizontal market power concerns, since Tenaska is increasing its existing indirect stake in the facility, the holding company argues in the filing.