PUBLIC UTILITY COMMISSION
Harrisburg, PA 17105-3265
Public Meeting held March 17, 2011
Commissioners Present:
Robert F. Powelson, Chairman
John F. Coleman, Jr., Vice Chairman
Tyrone J. Christy
Wayne E. Gardner
James H. Cawley
Application of Veolia Energy Philadelphia, Inc, for Approval Of The Transfer of Tangible Property Used Or Useful in the Public Service Pursuant to
66 Pa. C.S.A § 1102(a)(3) / Docket Nos.
A-2011-2221891
G-2010-2193998
ORDER
BY THE COMMISSION:
On August 13, 2010, Veolia Energy Philadelphia, Inc (VEPI, or Company) f/k/a Trigen-Philadelphia Energy Corporation filed a request for approval of an Affiliated Interest Agreement between Veolia Energy Efficiency (PA), LLC (VEEPA) at Docket No. G-2010-2193998 (Lease). On January 24, 2011, VEPI filed an Application at Docket No. A-2011-221891 (Application), pursuant to Section 66 Pa. C.S. §1102, requesting the Commission issue Certificates of Public Convenience approving the transfer of tangible property used or useful in the public service between VEPI and VEEPA.
Pursuant to the Petition of Trigen-Philadelphia Energy Corporation under 52 Pa. Code § 5.41 for Approval of an Economic Development and Load Stabilization Rider Agreement and Related Operations and Maintenance Agreement, at Docket No.P-2010-2185173 and approved by the Commission By Order entered December 16, 2010, and the Application of Trigen-Philadelphia Energy Corporation for Approval of the Acquisition by Long term Lease of Tangible Property Used and Useful in the Public Service under 66 Pa. C.S. § 1102(a)(3), at Docket No. A-2010-2185172 and approved by the Commission by Order entered December 16, 2010, VEPI has entered in to agreements with its largest customer, the Trustees of the University of Pennsylvania (Penn).
In order to fulfill its obligations under its agreements with Penn, VEPI has entered into a series of agreements with its affiliate VEEPA, a Delaware limited liability company, to demolish certain equipment on the premises owned by VEPI and construct and operate two 250,000 pounds per hour, saturated steam, 265 PSI, rapid start O-type package boilers (the Rapid Fire Boilers) on a portion of VEPI’s Schuylkill Station which is currently non-operational. Both VEPI and VEEPA are wholly-owned subsidiaries of Veolia Energy North America Holdings, Inc., a Delaware corporation.
The Company initially filed the Lease at Docket No. G-2010-2193998 solely as an Affiliated Interest Agreement. Upon conversations with the Commission’s Law Bureau, the Company subsequently filed an Application at Docket No. A-2011-2221891, pursuant to Section 66 Pa. C.S. §1102.
The property subject to the Lease is located at 26th and Christian Streets, Philadelphia, commonly known as the Schuylkill Station on land owned by Philadelphia Electric Company (PECO). The Landlord, VEPI is the owner of a portion of a building at Schuylkill Station known as Building A-2.
The A-2 Building at Schuylkill Station is a multi-story structure with two cement floors. The portion of the A-2 Building in which the Rapid Fire Boilers will be placed currently contains old non-operational oil fired boilers and associated infrastructure. Except for the space taken up by the Rapid Fire Boilers, VEPI will maintain full use of the A-2 Building.
The Lease states the Tenant (VEEPA) will pay an annual rent of One Dollar ($1.00) in advance, on each anniversary of the Commencement Date.
In addition, VEEPA shall pay “Additional Rent” to the Landlord (VEPI) above and beyond the annual rent of One Dollar ($1.00). Additional Rent includes Tenant’s obligation to pay taxes, insurance and incremental utilities under section 5(c), 9(a) (iii) and 11 of the Lease, respectively, as well as the Landlords right to cure under section 8(d). Additional Rent sums are estimated as (i) property insurance, (ii) taxes (not expected to be statistically significant) and, (iii) miscellaneous charges such as Shared Facilities Cost.
Conclusion
The Commission has determined the filings at G-2010-2193998 and A-2011-2221891 are reasonable and consistent with the public interest. Approval of these filings does not constitute a determination that the associated costs or expenses are reasonable or prudent for the purposes of determining just and reasonable rates. Furthermore, the Commission’s approval is contingent upon the possibility that subsequent audits, reviews and inquiries in any Commission proceeding may be conducted, pursuant to 66 Pa. §§ 2102, et seq. For these reasons, the Commission concludes that approval of this Application and associated Affiliated Interest Agreement is in the public interest, and necessary or proper for the convenience of the public; THEREFORE,
IT IS ORDERED:
1. That the Application of Veolia Energy Philadelphia, Inc. at Docket No.A-2011-2221891is hereby approved.
2. That the Affiliated Interest Agreement at Docket No. G-2010-2193998 is hereby approved.
3. That a Certificate of Public Convenience shall be issued pursuant to Section 66 Pa. C.S. §1102, approving the transfer of tangible property used or useful in the public service between Veolia Energy Philadelphia, Inc and Veolia Energy Efficiency (PA), LLC at Docket No.A-2011-2221891.
4. That these proceedings, at Dockets No. A-2011-2221891 and
G-2010-2193998, be marked closed.
BY THE COMMISSION,
Rosemary Chiavetta
Secretary
(SEAL)
ORDER ADOPTED: March 17, 2011
ORDER ENTERED: March 18, 2011
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