PDF of 2015 Annual Report

D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
ANNUAL REPORT 2015
INSIDE
2
DELIVERING VALUE IN EVOLVING MARKETS
22
CAPITAL MANAGEMENT
4
TENASKA AT A GLANCE
2
4
POWER GENERATION
6
2015 BY THE NUMBERS
27
CORPORATE SERVICES
8
MESSAGES FROM OUR LEADERSHIP
2
8FINANCE
12
BUSINESS UNIT REVIEW
3
0
BOARD OF STAKEHOLDERS
13
NATURAL GAS MARKETING
3 1
BUSINESS MANAGEMENT
16
POWER MARKETING
32
OFFICES & CONTACT INFORMATION
18DEVELOPMENT
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
1
DELIVERING VALUE
IN EVOLVING
MARKETS
Tenaska adapts to fluctuating market conditions, finding
new ways to deliver value and meet the unique needs
of customers and partners.
Anchored in a solid foundation of ethics, expertise
and private enterprise, Tenaska not only survives
but thrives in an evolving industry.
2
TENASKA ANNUAL REPORT 2015
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
3
ENERGY MARKETING
Natural Gas
Electric Power
BUSINESS UNITS
TENASKA AT A
GLANCE
ENERGY MARKETING
DEVELOPMENT
CAPITAL MANAGEMENT
POWER GENERATION
FINANCE & CORPORATE SERVICES
Tenaska Marketing Ventures
Tenaska Marketing Canada
Tenaska Gas Storage, LLC
Tenaska Power Services Co.
Tenaska Power Canada
Tenaska Power Management, LLC
DEVELOPMENT
Project Development
Distributed Solar Investments
• Soltage, LLC
• Suncrest Solar, Inc.
Natural Gas Exploration & Production
CAPITAL MANAGEMENT
Acquisition & Divestiture
Asset Development
Asset Optimization
Capital Formation
Investor Relations
BUSINESS UNIT
Tenaska Capital Management, LLC
POWER GENERATION
Engineering & Construction Management
Technology Assessment & Evaluation
Operations
Asset Management
Environmental Services
BUSINESS UNIT
Engineering & Operations Group
FINANCE & CORPORATE SERVICES
Finance, Tax & Accounting
Legal
Information Technology
Human Resources
Government & Public Affairs
4
TENASKA ANNUAL REPORT 2015
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
5
8 BILLION
$
Gross Operating Revenues
1.5 BILLION
$
Total Balance Sheet Equity
687
3.3 BILLION
$
Total Assets
10%
EMPLOYEES
Total U.S. Natural Gas Consumption Sold Or Managed
DEVELOPMENT
CAPITAL MANAGEMENT
CORPORATE
PLANT OPERATIONS
ENERGY MARKETING
2015
Tenaska, one of the largest private, independent
energy companies in the United States, is an
established leader in:
• Development, design, financing,
construction management, ownership and
operation of power generating facilities;
• Energy marketing, including natural gas
and electric power;
• Management of private equity investments
in the power and midstream sectors,
including risk management, acquisition,
operations and divestiture services; and
• Services related to natural gas exploration,
production and transportation systems.
BY THE NUMBERS
6
10,913 MW
Managed Plant Operations
TENASKA ANNUAL REPORT 2015
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
24,495 MW
Power Marketing Contracts Managed
Tenaska has offices across North America:
• Omaha, Nebraska (Headquarters)
• Dallas, Texas
• Denver, Colorado
• Calgary, Alberta, Canada
• Pittsburgh and Philadelphia, Pennsylvania
• Boston, Massachusetts
• Vancouver, British Columbia, Canada
Tenaska Energy, Inc. and Tenaska Energy
Holdings, LLC (collectively Tenaska) are
privately held and operate as co-holding
companies. In addition to companies and
projects that are subsidiaries or partially
owned by Tenaska, this report includes
information on companies and projects that
are managed but not owned by Tenaska,
including: Tenaska Resources, LLC; private
equity investments managed by Tenaska
Capital Management, LLC; and other entities
and business units.
7
Tenaska delivers on its promises.
We bring innovative and value-added
solutions to our customers and partners.
A Message From
Our CEO & Vice Chairman
Jerry K. Crouse
We have developed strong, long-term relationships
ON DELIVERING...
with partners, investors, customers and financial
flexibility to effectively adapt. In 2015, Tenaska
institutions and maintained them for nearly 30 years.
suspended dedicated efforts in biofuels and
And we have an experienced team with the right
agricultural commodities marketing and liquefied
skills to successfully develop, construct, finance and
natural gas development for high-horsepower use
operate plants.
due to sustained low oil prices and the resulting
Investing in Solar
In 2015, construction continued on Tenaska Imperial
Solar Energy Center West, our second utility-scale solar
installation in California’s Imperial Valley. The project
is scheduled for completion in 2016. Complementing
2015 challenged many in the energy industry, with
In addition, TPS has seen a greater emphasis on
these solar projects with long-term power purchase
market developments ranging from unprecedented
renewable and environmental-based transactions
agreements, we have made additional investments in
low natural gas prices to uncertain regulation and
and bilateral trading throughout North America.
continued growth in renewables. Yet, Tenaska still
delivered on its promises. We brought innovative,
value-added solutions to our customers and partners.
The hallmarks of Tenaska’s reputation are openness,
reliability, innovation and customer service. Our success
developing, constructing, owning and optimizing
energy assets, and delivering value in diverse market
conditions has solidified Tenaska’s position as an
industry leader.
In a service-driven environment, both companies
offer increased data management and reporting
prices, oversupply and disparate production costs
also resulted in a temporary scale-back of drilling
and production on leases Tenaska Resources, LLC
holds in the northeastern shale states. We remain
well-positioned to re-engage exploration and
production as soon as gas pricing improves.
distributed solar generation with both Soltage, LLC and
A Tradition of Excellence
In 2015, generating plants that Tenaska owns or
footprint into the commercial and residential sectors.
manages continued their long-standing records
We recognized the potential of distributed solar
innovative solutions to unique challenges.
generation in 2008 when we first invested in it, and
Changing Financial Models
we continue to broaden our investment as renewable
for expertise, an understanding of the changing
decreased demand for services. Low natural gas
Suncrest Solar, Inc. This further expands Tenaska’s solar
tools that enhance customer experience and offer
Partners, customers and investors look to Tenaska
As markets shifted, Tenaska demonstrated the
power sources play an increasingly larger role in
meeting U.S. power generation needs.
in and commitment to best-in-class operations
and asset management. Employees at the plants
directly operated by Tenaska earned numerous safety
awards, maintained facilities for optimum efficiency
and performance, and ensured compliance with
regulatory and environmental requirements. Tenaska's
industry and new ways to navigate those changes.
Mergers, Acquisitions and Sales
safety, efficiency, reliability and environmental
We continue to pursue the development, design
The private equity market also has changed, and
compliance standards maintain the value of the
An Energy Marketing Leader
and operation of fully contracted, natural gas-fueled
Tenaska is positioned to manage mergers and
plants we own, operate and manage.
Now starting its 25th year in business, Tenaska
generating plants, engaging in a number of these
acquisitions. In late 2015, Tenaska Capital Management,
Marketing Ventures is a top five natural gas marketer
opportunities over the past year. At the same time,
LLC successfully realized more than 4,900 MW in its
in North America. The natural gas market has seen
our development model has diversified with the
investment portfolio, consistent with the affiliate’s
growth and a greater need for asset management
market. Partially hedged models can accommodate
business strategy of buying, developing, optimizing
expertise. In 2015, we handled significant increases
shorter-term contracts, particularly in centrally cleared
and divesting assets.
in natural gas volumes sold or managed.
markets where capacity auctions offer some revenue
For Tenaska Power Services Co. (TPS), centrally
cleared markets have fundamentally changed the
overall power trading market, moving away from
an emphasis on locational value and long-term
transmission positions to asset management.
8
certainty. The model is working. Tenaska was wellpositioned to finance the 925-megawatt (MW)
Tenaska Westmoreland Generating Station in early
2016. Construction of the facility, in the attractive PJM
Interconnection market, is set to begin later this year.
TENASKA ANNUAL REPORT 2015
Evolving and Delivering
Regardless of how things change in the energy
industry, our team of forward-thinking professionals
adapts to find new opportunities. Our record demonstrates this. We provide value to partners, customers,
Because Tenaska is a private, independent company,
investors and the communities everywhere we serve
our seasoned professionals can efficiently and effec-
and operate. We deliver.
tively manage market conditions. This may mean
divesting certain assets or acquiring new assets in
different energy sectors as conditions dictate.
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
9
To succeed in this transformative environment,
companies must evolve and adapt to industry
and market changes. Tenaska has done this.
A Message From
Our Chairman
Howard L. Hawks
...AND EVOLVING
Ten years ago, few could have predicted what energy
We strive to set a high bar as the industry standard
businesses face today. Consider:
of excellence in serving customers and partners
•The economic development of shale gas reserves
and other technological advances that have
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10
2000
TENASKA ANNUAL REPORT 2015
•The surplus of natural gas, resulting in sustained
low natural gas prices;
•Logistical and pricing challenges due to dramatic
over the long term. From the beginning, we have
developed and retained talented, experienced
people who steadfastly maintain our reputation
for high ethical standards, safety and delivering
uncompromising customer value.
Leveraging Expertise
differences in supply and market locations, as
We have successfully leveraged our core expertise
well as access;
in developing, constructing and operating natural
•Lower-than-expected economic growth;
•Increased regulatory demands to reduce
gas-fueled power plants to become a leader in
solar and other renewable power projects. Our
greenhouse gas emissions, paired with increased
long-standing commitment to natural gas marketing,
energy efficiency;
power marketing and capital management remains
•State-by-state plans to implement renewable
energy requirements;
•Federal policy and mandates driving the
industry; and
•Changes in risk profiles and funding sources.
unchanged. We are known throughout the industry
for our work ethic and ability to develop innovative
ways to meet customer needs and to add value.
Tenaska has consistently managed risk by prudently
deploying capital in a variety of markets and
To succeed in this transformative environment,
technologies. This diversity has helped limit Tenaska’s
companies must evolve and adapt to industry and
exposure and insulate the company against market
market changes. Tenaska has done this historically,
swings and changes.
but it is more complex today. There are an increasing
number of variables and significant unforeseen
consequences. Anchored in financial stability, the
benefits of being privately held and an enduring
commitment to the business, Tenaska has maintained
consistent growth while some of our competitors have
exited the marketplace.
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
Strong Core Values
Whatever changes occur in the industry, Tenaska’s
solid business approach and core values won’t change.
We are prepared to meet the challenges. Our stable
growth and balance sheet provide a reliable foundation
for meeting customer needs in evolving markets.
11
BUSINESS UNIT
NATURAL GAS
REVIEW
MARKETING
Tenaska Marketing Ventures, including Tenaska
by Platts Gas Daily, and it has been ranked in the top
Marketing Canada and Tenaska Gas Storage, LLC
10 for each of the last 13 years. For the second year in
(collectively TMV), continued its record of success
a row, TMV is rated first in customer value and loyalty
in 2015, providing reliable and innovative solutions
in Mastio & Company’s ranking of major North
for customers and moving natural gas when and
American natural gas marketers.
where it was needed.
A Marketing Leader
feet (Tcf) of natural gas, or approximately 7.6 billion
As it enters its 25 year, TMV has grown to become
cubic feet per day (Bcf/d), in 2015, accounting for
one of North America’s leading natural gas marketers,
approximately 10 percent of total consumption
with the size, financial stability and depth of industry
in the United States. TMV also transported more
knowledge needed to anticipate and react to market
than 11 Bcf/d and had storage capacity of 126 Bcf.
th
fluctuations. For the seventh consecutive year, TMV
is one of the top companies in North America for gas
pipeline capacity release trading, as measured by
CapacityCenter.com. The company is ranked among
the top five natural gas marketers in North America
12
TENASKA ANNUAL REPORT 2015
The company sold or managed 2.7 trillion cubic
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
In 2015, TMV continued its strong growth, responding
to the wave of shale gas and pipeline development in
North America. The company increased sales by more
than 10 percent and successfully secured agreements
13
NATURAL GAS MARKETING
TOP RANKED
Natural Gas Pipeline Capacity Release Trader
(Source: CapacityCenter.com)
2.7 TCF
Natural Gas Sold Or Managed In 2015
126 BCF
10%
Total U.S. Natural Gas Consumption
TOP 5
Natural Gas Storage Inventory
North American Natural Gas
Marketer Since 2013
(Source: Platts Gas Daily)
Calgary
Vancouver
Boston
As it enters its 25th year, TMV has grown
to become one of North America’s
leading natural gas marketers.
Omaha
Denver
Dallas
with several major producers. TMV’s asset optimiza-
TMV’s services have evolved with the market. The
tion expertise and ability to move and manage large
company adeptly handles the changing directional
volumes of natural gas provide significant value to
flows of pipelines and pursues emerging opportu-
these producers.
nities, including sales to power generators, Mexican
Delivering Gas When and Where Needed
As the market experiences unprecedented growth
WEST
A Unique and Trusted Advisor
TMV’s established business model accommodates
As an independent, private marketer, TMV occupies a
customers’ changing needs across the value chain.
unique niche in the industry. It has succeeded over the
Customers rely on TMV’s physical focus on the
years when others have not because of its proven, long-
purchase, sale and delivery of natural gas, its knowl-
term focus, its ability to provide value and its dedication
edge of pipeline dynamics in different geographic
to meeting the individual needs of customers. Over
areas and its ability to manage and optimize pipeline
25 years, TMV has developed a national reputation
and become an industry leader with large-company
capabilities while retaining personal, trusted advisor
relationships with its customers.
14
TMV
with their own specific requirements.
in supply, infrastructure and corresponding demand,
and storage capacity.
NORTH
markets and liquefied natural gas exporters, each
TENASKA ANNUAL REPORT 2015
SOUTH
REGIONS
TMV Services
Areas Of Operation
MAJOR TMV CUSTOMER
TMV OFFICE
• Purchase and sale of natural gas
• Acquisition, management and optimization of natural gas
transportation and storage capacity
• Supply and demand volume swing management
• Energy risk management and financial and physical hedging
• Scheduling, nominations and market operations
• Customized accounting, settlement, invoicing and reporting
• Seven-day-a-week trading and scheduling operations
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
15
Philadelphia
Dallas
MARKETS
POWER
CAISO
MARKETING
WECC
SPP
ERCOT
AESO
SPC
MISO
TPS
SERC
Areas Of Operation
PJM
NYISO
IESO
ISO-NE
NPCC
TPS CUSTOMER
TPS OFFICE
Tenaska Power Services Co. (TPS) has seen
helped others realize opportunities throughout the
significant changes in power marketing since it
Midwest and Canada. It expanded into New England
entered the business nearly 20 years ago, adapting
Independent System Operator (ISO-NE), offering
to more centrally cleared markets in which financial
energy management services and marketing environ-
trading is the norm.
mental products and storage resources. It also added
TPS had a successful year, increasing trading activity
and enhancing customer value in the midst of less
weather volatility, changes in wholesale market
a significant generation portfolio in the southeastern
United States and successfully engaged in bilateral
trading and energy management contracts in the West.
structures and persistently low power prices. It added
A leader in renewable energy trading, TPS added
customers, including a number of private equity
its first wind customer in PJM Interconnection and
firms entering the market or transferring portfolio
continued its prominence in wind contracts in Electric
ownership. TPS leverages the skills and experience of
Reliability Council of Texas (ERCOT). Aided by the
other Tenaska marketing entities to offer coordinated
extension of renewable tax credits, TPS increased
power and fuel marketing and energy management
its renewable customer count in ERCOT in 2015.
services to North American natural gas, coal and
renewable power plants.
Data Management a Defining Strength
1997
Providing Energy Management Services
INDEPENDENT
POWER PRODUCERS
INDUSTRIALS
UTILITIES
Growth in Evolving Markets
etary data management and settlement system
developed by TPS, is gaining momentum among
equity investors built new facilities and large users
customers for its multifaceted and customizable
sought private contracts in lieu of procuring from utili-
data capture and analytical capabilities.
ties. The company was selected by MGM in Nevada to
TPS expects PTP to become
provide retail electricity and renewable energy credits
a valuable asset to customers
for all of its facilities in Las Vegas. TPS also entered
as they adapt to evolving
into independent, renewable energy agreements in
electricity markets.
California Independent System Operator (CAISO) and
TENASKA ANNUAL REPORT 2015
52%
32%
16%
2.9 MILLION
$
Recovered For Customers
Using PowerTools Platform
24,495 MW
Power Marketing Contracts Managed
TPS
Customer Profile
PowerTools Platform® (PTP®), a sophisticated, propri-
TPS secured opportunities as utilities and private
16
SINCE
TPS Services
• Purchase and sale of electric capacity, energy, ancillary services and renewable energy products
• Acquisition, management and optimization of electric transmission and congestion rights
• Energy risk management, including financial and physical hedging
• Market operations and interface, scheduling, tagging and bidding services
• System operations, dispatch, Supervisory Control and Data Acquisition (SCADA) and Energy
Management Systems (EMS) services
• Customized accounting, settlement, invoicing and reporting
• Shadow settlement, predictive settlement and Independent System Operator dispute management
• Round-the-clock trading and operations
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
17
DEVELOPMENT
3,500 MW
Pre-Financing Development
9,000 MW
Developed
As the energy industry evolves, Tenaska’s
Overcoming Market Challenges
Development Group continues to build on its
Tenaska has adapted to the challenges presented
proven expertise in energy project development,
by low natural gas prices, supply excesses, demand
leveraging its experience in natural gas-fueled
disparities, regulatory uncertainties and diverse
projects to expand its presence in renewables
customer and partner needs. It has made significant
and emerging technologies.
progress developing power projects in centrally
Tenaska is adept at maneuvering through changing
markets. Its financial stability and available capital,
technological strengths and long-term focus
position it favorably in diverse industry segments.
cleared competitive markets and embracing new
contracting, financing and project optimization
models to meet changing industry needs. The
Development Group also has adapted to growing
consumer and regulatory demand for sustainable
sources of energy, pursuing technologies such as
distributed generation and battery storage, and new
investment opportunities in different geographic areas.
DEVELOPMENT
Expertise
WIND
BATTERY STORAGE
DISTRIBUTED SOLAR GENERATION
UTILITY-SCALE SOLAR
NATURAL GAS
18
TENASKA ANNUAL REPORT 2015
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
19
DEVELOPMENT
Tenaska Expands in
Distributed Generation
Tenaska’s footprint in renewable energy generation
expanded in 2015 through planned investments
in distributed generation companies supplying
electricity to a range of customers across the United
States. Distributed generation is power generated
from residential or commercial systems, such as an
array of rooftop solar panels.
In 2008, Tenaska made its first major investment
in Soltage, LLC, a New Jersey-based company that
develops, finances, installs, owns and operates
rooftop and ground-mounted solar electric generating facilities. In March 2015, Tenaska made a
second major investment and assumed a controlling
interest in the company. Soltage provides electricity
Natural Gas-Fueled Projects
Tenaska Frontier Generating Station, a combined-
to commercial, industrial, educational, utility and
In 2015, Tenaska had three natural gas-fueled power
cycle facility in Texas.
municipal customers under long-term contracts.
generation projects maturing simultaneously. It
Utility-Scale Solar Progress
In December, Tenaska and Soltage announced their
Tenaska Imperial Solar Energy Center West, the
first joint acquisition of a portfolio of solar generating
second utility-scale solar plant Tenaska has developed
assets, including several already in commercial oper-
in Southern California’s Imperial Valley, sent its first
ation in eastern states. This acquisition increased the
electricity to the California grid in 2015. The 150-MW
number of megawatts that Soltage has successfully
solar field, scheduled for completion in 2016, will
closed to 86.
completed development of the 925-megawatt
(MW) Tenaska Westmoreland Generating Station in
Pennsylvania in preparation for a 2016 financial closing.
This included management of all disciplines required
to create a shovel-ready project. It also involved
equity and debt management for a partially hedged
project, a model that works effectively in centrally
cleared markets. Successful development of the
Westmoreland project demonstrates how Tenaska,
as a private company, is able to be patient and flexible
in responding to market changes.
Tenaska’s Development Group also positioned the
proposed 800-MW Tenaska Brownsville Generating
Station in Texas for financial close, either through
hedged investment or contractual agreement, when
market conditions warrant. Located in the southern
end of the Electric Reliability Council of Texas (ERCOT)
market and near growing electricity demand in the
reformed Mexican market, the project demonstrates
the competitive advantages Tenaska seeks for
generate enough power to meet the electrical needs
Tenaska also expanded in the residential solar market
of approximately 55,000 California homes. Tenaska
with a strategic investment in Suncrest Solar, Inc.,
completed permitting for the 250-MW Wistaria Ranch
a Utah-based company that installs solar panels
Solar Energy Center, also in the Imperial Valley, and
on the roofs of residential electric utility customers.
sold the project in 2015.
Suncrest is a rapidly growing company investing in
Beyond Electricity
operations in California, South Carolina and Utah.
While Tenaska is known for its development of electric
It is one of the few solar companies that not only
generation projects, it is also prepared to explore
designs, permits, sells and installs rooftop systems
opportunities for liquefied natural gas (LNG) when
but also finances, owns, operates and maintains
pricing and marketing conditions are favorable.
them throughout the system life. This provides
Tenaska also retains significant exploration and
important continuity of service to homeowners. In
production interests through Tenaska Resources, LLC
2015, Suncrest experienced a 400 percent expansion
in the Marcellus and Utica shale gas formations in
over its 2014 operations.
Pennsylvania and West Virginia.
As the appetite for distributed renewable energy
customers. The group also advanced the Tenaska
As a private, independent energy company, Tenaska
Roan’s Prairie Generating Station, a 650-MW, simple-
has the flexibility and innovation to meet dynamic
Suncrest are well-positioned to meet new and
cycle peaking project adjacent to the existing
and rapidly changing market needs.
growing customer demand.
20
TENASKA ANNUAL REPORT 2015
continues to grow across the nation, Soltage and
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
21
CAPITAL
MANAGEMENT
6.5 BILLION
$
Investments & Acquisitions
Managed Since 2005
10,500 MW
Aggregate Electric Power
Generation Managed Since 2005
TCM Managed Assets Overview
2015 was another strong year for Tenaska Capital
to these assets while under TCM management.
Management, LLC (TCM), an affiliate of Tenaska
During 2015, revenue enhancement activities included
and manager of energy investment partnerships on
continued efforts to convert the Rolling Hills plant
behalf of institutional investors. Following a $1.8 billion
from an 850-MW peaking facility to a 1,440-MW
recapitalization in late 2014 of seven generating plants
combined-cycle facility. The New Covert plant,
it managed, TCM initiated the sale of this more than
which currently sells its output to the MISO market,
4,900-megawatt (MW) portfolio. The sale closed in
Power Generating Assets
NAME
LOCATION
MW
ACQUIRED
FULLY
REALIZED
Commonwealth Chesapeake Company
New Church, Virginia
315
2005
2008
Calumet Energy Team
Chicago, Illinois
325
2005
2008
High Desert Power Project1
Victorville, California
830
2006
Rio Nogales Power Project
Seguin, Texas
800
2006
2012
Holland Energy
Beecher City, Illinois
665
2006
2009
completed construction of the Segreto substation and
Big Sandy Peaker Plant
Kenova, West Virginia
300
2006
December 2015. The portfolio included the Lincoln
interconnection to PJM, a larger, more liquid market
Wolf Hills Energy
Bristol, Virginia
250
2006
and Crete plants in Illinois, the Rolling Hills plant in
with improved revenue potential. The official transition
University Park Energy
University Park, Illinois
300
2006
2011
Ohio, the New Covert facility in Michigan and three
from MISO to PJM is planned for June 2016.
Armstrong Energy Limited Partnership
Shelocta, Pennsylvania
625
2007
2008
Pleasants Energy
St. Marys, West Virginia
313
2007
2008
Troy Energy
Luckey, Ohio
600
2007
2008
656
2007
2015
US Power Generating facilities in New York. These
plants, initially acquired between 2007 and 2013,
operate in the PJM Interconnection, Midcontinent
Independent System Operator (MISO) and New York
Independent System Operator (NYISO) markets. The
TCM continues to manage an investment in Azure
Midstream Holdings, LLC, one of the largest natural
Lincoln Generating Facility
Manhattan, Illinois
gas gathering and processing systems in East Texas
Crete Energy Venture
Crete, Illinois
328
2007
2015
and northern Louisiana.
Rolling Hills Generating1
Wilkesville, Ohio
850
2008
2015
New Covert Generating Company
Covert, Michigan
1,100
2008
2015
acquisition and subsequent sale of these plants is
Actively Evaluating Prospects
Astoria Generating Station
Queens, New York
1,335
2013
2015
reflective of TCM’s strategy to buy, optimize and sell
Since 2005, TCM has managed the acquisition of
Gowanus Generating Station
Brooklyn, New York
551
2013
2015
or exit energy assets.
more than $6.5 billion of power generation and
Narrows Generating Station
Brooklyn, New York
283
2013
2015
CAPACITY
ACQUIRED /
INITIATED
FULLY
REALIZED
TCM’s seasoned investment professionals have a
strong record in acquisitions, asset management and
divestitures. In addition to its own expertise in business
development, asset management and financial and
capital markets, TCM leverages the full complement
of Tenaska capabilities, including natural gas and
power marketing, operations, engineering, construction and regulatory compliance.
midstream assets or companies and has successfully
managed the sale of a significant portion of those
NAME
LOCATION
investments. TCM continues to actively evaluate new
Caledonia Energy Partners
Caledonia, Mississippi
opportunities to acquire, optimize and monetize
Chestnut Ridge Storage
Uniontown, Pennsylvania
energy assets based on a value-oriented entry point,
Frontier Gas Services
Arkansas / Texas
0.5 Bcf / day
2009
2011
TPF II East Texas Gathering
Nacogdoches County, Texas
1.2 Bcf / day
2009
20132
Azure Midstream Holdings
Dallas, Texas3
4.2 Bcf / day4
2013
Navigator Energy Services
Dallas, Texas
85 Kbbl / day
2013
2014
EMPLOYEES
ACQUIRED
PARTIALLY
REALIZED
4,000
2006
20106
2006
20106
responsible risk management and best-in-class
operations. TCM’s financial strength, depth of relationships with industry participants, financial institutions
and investors, and ability to analyze and penetrate
Assets Improved, Optimized
evolving markets are key factors in its success. Equity
The successful sale of these power plants reflects,
capital for these acquisitions has been provided by
in part, the enhancements and optimizations made
private equity funds managed by TCM.
22
Natural Gas & Oil Midstream Assets
TENASKA ANNUAL REPORT 2015
11.7 Bcf
2006
2008
2007
2015
Infrastructure Construction & Maintenance Companies
NAME
LOCATION
InfrastruX Group
Seattle, Washington
Hawkeye
Hauppauge, New York
1 Operated By A Tenaska Affiliate
2 Merged With Azure Midstream Holdings
3Headquarters
4 Includes Assets Managed For Azure Midstream Partners, L.P.
5 Hawkeye Employment Numbers Reported As Part Of InfrastruX Employees
6 Acquired By Willbros Group, Inc.
3
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
5
3
23
POWER
GENERATION
97.7 %
5-Year Average Peak-Hour Availability
10,913 MW
Managed Plant Operations
150 MW
Solar Under Construction
Natural Gas and Solar Energy
significant third-party contracts and finalized
In 2015, Tenaska dedicated major efforts to construct
long-term service agreements for the Tenaska
the 150-MW Tenaska Imperial Solar Energy Center
Westmoreland Generating Station near Pittsburgh
West, its second utility-scale solar project in Southern
to support a 2016 construction start. On behalf of
California’s Imperial Valley. When the project achieves
TCM, the Rolling Hills peaking to combined-cycle
full commercial operation in 2016, it will generate clean
conversion project received most of its environmental
power for San Diego Gas & Electric Company using
permits, while work continued on an optimization of
approximately 1.8 million solar panels on single-axis
reclaimed water use and water supply alternatives
trackers that follow the sun.
at the High Desert Power Project in California.
Tenaska also completed construction of the Segreto
Plants Recognized for Safety
switchyard and interconnection at the New Covert
Safety is a Tenaska priority, and in 2015, the Tenaska
Generating plant in Michigan, an asset managed
Frontier Generating Station near Shiro, Texas, cele-
by TCM until its sale in December. Construction was
brated 1 million safe working hours — zero lost-time
completed ahead of schedule to support the switch
incidents since the start of commercial operation more
from Midcontinent Independent System Operator
than 15 years ago. Tenaska-operated plants received
(MISO) to PJM Interconnection in 2016.
28 National Safety Council awards, and the Tenaska
Environmental Expertise
Tenaska’s Engineering & Operations Group has
Nine of those plants were directly operated by Tenaska
a reputation for efficient, cost-effective projects,
affiliates. The remaining plants were operated under
reliable plant operations and customer-focused
contract with third parties.
asset management. The engineering, construction,
operations and asset management teams manage
construction and operations of natural gas and
renewable energy facilities that consistently meet
safety, environmental and regulatory requirements.
responsible for environmental compliance across
a U.S. Occupational Safety and Health Administration
Voluntary Protection Program Star Worksite.
its fleet of plants. In 2015, Tenaska was ranked
Tenaska’s Engineering & Operations Group continues
44th among the world’s Top 100 Green Utilities
to optimize plant operations, ensuring its facilities
by trade journal Energy Intelligence based on its
remain compliant in an ever-changing regulatory
regarded for its expertise, experience and innovative
low greenhouse gas emissions and the size of its
environment and positioning its assets for long-
problem-solving. Working closely with Tenaska’s
renewable energy portfolio.
term success. In addition to managing both natural
The Engineering & Operations Group is highly
Finance and Development groups and Tenaska Capital
Management, LLC (TCM), it adds value throughout an
In 2015, Tenaska managed approximately 11,000
asset’s useful life by creating operational efficiencies
megawatts (MW) at 15 power plants in 10 states,
and ensuring that facilities are well maintained.
enough power to serve approximately 11 million homes.
24
Tenaska’s Engineering & Operations Group is
Virginia Generating Station maintained its status as
TENASKA ANNUAL REPORT 2015
The group’s engineering and environmental teams
advanced several new and existing power projects.
They secured final permits, selected an engineering,
gas-fueled and renewable energy plants, it continually
evaluates advanced energy technologies to help
Tenaska assess new products and opportunities.
procurement and construction contractor, negotiated
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
25
POWER GENERATION
CORPORATE
12
22
21
11
SERVICES
20
9
17
13
8
7
14
10
19
5
18
4
6
1
3
16
NORTH AMERICAN ELECTRIC RELIABILITY
CORPORATION (NERC) REGIONS
WECC
2
15
SPP RE
MRO
TRE
SERC
RF
FRCC
Managed Power Generation
NPCC
PLANTS & PROJECTS
Tenaska-Owned / Operated Natural Gas Plants
1
Tenaska Central Alabama Generating Station
885 MW
2 Tenaska Frontier Generating Station
830 MW
3 Tenaska Gateway Generating Station 845 MW
4 Tenaska Georgia Generating Station
945 MW
5 Tenaska Kiamichi Generating Station 6 Tenaska Lindsay Hill Generating Station 7 Tenaska Virginia Generating Station 15 Tenaska Brownsville Generating Station 800 MW
16 Tenaska Roan’s Prairie Generating Station 650 MW
17 Tenaska Westmoreland Generating Station 925 MW
1,220 MW
859 MW
885 MW
Tenaska / TCM-Managed Natural Gas Plants
8 Big Sandy Peaker Plant 300 MW
9 Crete Energy Venture* 328 MW
10 High Desert Power Project 830 MW
11 Lincoln Generating Facility* 656 MW
12 New Covert Generating Company* Natural Gas Plants in Advanced
Pre-Financing Development
1,100 MW
13 Rolling Hills Generating* 850 MW
14 Wolf Hills Energy 250 MW
Tenaska-Owned Solar Plant
18 Tenaska Imperial Solar Energy Center South 130 MW
Solar Plant in Construction
19 Tenaska Imperial Solar Energy Center West 150 MW
Solar Investments
20 Soltage, LLC 86 MW
21 Suncrest Solar, Inc. 9.4 MW
Wind Investment
22 Elkhorn Ridge Wind, LLC 79 MW
*Sold In December 2015
26
TENASKA ANNUAL REPORT 2015
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
27
13.7 BILLION
$
Aggregate Financing
FORBES RANKING
Consistently Among Largest
Private U.S. Companies
FINANCE
Power Generation Investment Overview
Tenaska is one of the largest private, independent
New Financing Model
energy companies in the United States. Its success
Through strong and long-standing relationships
is based on a strong foundation in developing,
with many leading U.S. and international lending
financing, designing, constructing, operating and
institutions, the Tenaska Finance Group has raised
managing energy assets and expertise in natural gas
more than $13.7 billion in bank facilities, capital
and power marketing. The company’s solid balance
market transactions, corporate facilities and equity,
sheet, strength of financial relationships and industry
supporting development of more than 9,000
knowledge provide stability through changing
megawatts (MW) of energy projects and the
markets and complex regulatory environments,
operation of Tenaska affiliates.
positioning Tenaska and its affiliates as trusted
advisors to customers. As a private company, Tenaska
takes a long-term view in its decision-making, without
focusing on quarter-over-quarter results. It acts
decisively when opportunities arise and is patient
when navigating unfavorable markets.
2015 was a good year for Tenaska, with more than
$8 billion in gross operating revenues. Tenaska
distinguished itself as an innovative leader in
renewable energy financing. Its depth and breadth
in power and natural gas markets allowed the
company to adjust its strategy in the face of
significantly increased natural gas supply, lower
pricing and substantial changes in gas storage and
pipeline transportation. Its fleet of natural gas-fueled
and renewable power generating projects provided
reliable power throughout the United States and is
positioned to produce value for coming decades.
In 2015, the Finance Group positioned the proposed
Tenaska Westmoreland Generating Station in
Pennsylvania for debt and equity financing with
partial hedging. Construction of this 925-MW
combined-cycle project in the PJM Interconnection
market is planned to begin in 2016.
Expansion Into Distributed Solar
Over the past three years, Tenaska financed and
constructed two utility-scale solar projects in Southern
California’s Imperial Valley, Tenaska Imperial Solar
Energy Center South and Tenaska Imperial Solar Energy
MW 1
POWER PURCHASER
TENASKA’S ROLE
CREDIT RATINGS
Tenaska Imperial Solar Energy Center West
CSOLAR IV West, LLC
El Centro, California, USA (under construction)
150
San Diego Gas
& Electric Company
Developer/
Owner/
Managing Partner
N/A 2
Tenaska Imperial Solar Energy Center South
CSOLAR IV South, LLC
El Centro, California, USA (2013)
130
San Diego Gas
& Electric Company
Developer/
Owner/
Managing Partner
BBB-/BBB
Tenaska Virginia Generating Station
Tenaska Virginia Partners, L.P.
Scottsville, Virginia, USA (2004)
885
Shell Energy North
America (US), L.P.
Developer/
Owner/Operator/
Managing Partner
Baa2/BBB
1,220
Shell Energy North
America (US), L.P.
Developer/
Owner/Operator/
Managing Partner
Baa3/BBB-
Tenaska Central Alabama Generating Station
Tenaska Alabama II Partners, L.P.
Billingsley, Alabama, USA (2003)
885
Shell Energy North
America (US), L.P.
Developer/
Owner/Operator/
Managing Partner
Baa3/BBB
Tenaska Lindsay Hill Generating Station
Tenaska Alabama Partners, L.P.
Billingsley, Alabama, USA (2002)
859
BE Alabama LLC
Developer/
Owner/Operator/
Managing Partner
Ba2/BB
Tenaska Georgia Generating Station
Tenaska Georgia Partners, L.P.
Franklin, Georgia, USA
(Phase 1 – 2001; Phase 2 – 2002)
945
Exelon Generation
Company, LLC
Developer/
Lessee/Operator/
Managing Partner
Baa3/BBB
Tenaska Gateway Generating Station
Tenaska Gateway Partners, Ltd.
Mt. Enterprise, Texas, USA (2001)
845
Shell Energy North
America (US), L.P.
Developer/
Owner/Operator/
Managing Partner
BBB-
Tenaska Frontier Generating Station
Tenaska Frontier Partners, Ltd.
Shiro, Texas, USA (2000)
830
Exelon Generation
Company, LLC
Developer/
Owner/Operator/
Managing Partner
N/A 2
Tenaska Kiamichi Generating Station
Kiowa Power Partners, LLC
Kiowa, Oklahoma, USA (2003)
Center West. In 2015, the company expanded its
investments in solar generation by increasing its equity
Other Investments
investment to a controlling interest in Soltage, LLC, a
PROJECT
MW
POWER PURCHASER
TENASKA’S ROLE
New Jersey-based distributed solar electric generation
Elkhorn Ridge Wind, LLC
Bloomfield, Nebraska, USA (2009)
79 1
Nebraska Public
Power District
Investor
Soltage, LLC
Jersey City, New Jersey, USA (20083)
86 4
Manufacturing, Retail
& Healthcare Industries
Investor
Suncrest Solar, Inc.
Salt Lake City, Utah, USA (20153)
9.45
Residential
Investor
company, and making an investment in Suncrest Solar,
Inc., a Utah-based residential solar company.
Tenaska prides itself on its proven ability to raise
capital and to recognize and create opportunities
for partners and investors. The company’s financial
strength contributes to its reputation.
28
PROJECT
TENASKA ANNUAL REPORT 2015
1 Plant Rating When Placed In Service/Upgraded
2 Commercial Bank Loan; Not Rated
3Headquarters
4 MWs Closed Through 2015
5 MWs Installed Through 2015
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
29
BOARD OF STAKEHOLDERS
BUSINESS MANAGEMENT
Corporate
Natural Gas Marketing
Power Marketing
Capital Management
Howard L. Hawks*
Tenaska Marketing Ventures
Tenaska Marketing Canada
Tenaska Gas Storage, LLC
Tenaska Power Services Co.
Tenaska Power Canada
Tenaska Power Management, LLC
Tenaska Capital Management, LLC
Chairman
Thomas E. Hendricks*
Executive Vice President
Jerry K. Crouse*
Vice Chairman
Tenaska Energy, Inc.
Howard L. Hawks
Co-Founder
Chairman
Chief Executive Officer
Tenaska, Inc.
Jerry K. Crouse
Vice Chairman
Tenaska Energy, Inc.
Gregory A. Van Dyke*
Chief Executive Officer
Tenaska, Inc.
Fred R. Hunzeker
President
& Chief Executive Officer
Tenaska Marketing Group
Thomas E. Hendricks
Co-Founder
Executive Vice President
Executive Vice President
Marketing, North Region
Senior Vice President
Finance & Administration
Chief Financial Officer
Drew J. Fossum*
Vice President
& General Counsel
Timothy G. Kudron
Senior Vice President
Finance & Administration
Joseph G. Hancock
Gregory B. Kelly
President
Development
Drew J. Fossum
Vice President
& General Counsel
Vice President
Finance
David D. Johnson
Todd S. Jonas
Senior Vice President
Operations & Asset Management
Vice President
Government & Public Affairs
Michael F. Lawler
Executive Vice President
Corporate Investments
Ronald N. Quinn
Executive Vice President
& Secretary
Daniel G. Ramaekers
Vice President
Information Technology
James H. Rich
Paul G. Smith
Senior Managing Director
Tenaska Capital Management, LLC
Vice President
Risk Management
Sheila R. Trueblood
Vice President
& Corporate Controller
Darrell W. Bevelhymer
Consultant & Retired Executive
Executive Vice President
Trading & Marketing, West Region
Kristen J. Gould
Senior Vice President
Tenaska Marketing Canada
Martin E. Titus
Senior Vice President
Structured Products
& Risk Trading
W. Terry Clarke
Christopher K. Forsman
Delette J. Olberg
Senior Vice President
Engineering & Construction
Mark J. Whitt
David W. Kirkwood
Corey S. Kopiasz
Nicholas N. Borman
Executive Vice President
Marketing, South Region
Vice President
Marketing, South Region
Vice President
Finance
President
Tenaska Power Services Co.
David N. Schettler
Vice President
Tax
Vice President & Treasurer
Kevin R. Smith
Executive Vice President
& Chief Financial Officer
Tenaska Marketing Group
Michael F. Lawler*
Executive Vice President
Corporate Investments
Timothy G. Kudron*
Gregory A. Van Dyke
John G. Obermiller
Lori A. Bruck
Executive Vice President
& Secretary
Chief Executive Officer
& Senior Managing Director
Tenaska Capital Management, LLC
Kevin R. Smith*
President
Chief Financial Officer
Ronald N. Quinn*
Daniel E. Lonergan
Fred R. Hunzeker*
President
& Chief Executive Officer
Tenaska Marketing Group
Vice President
Trading, South Region
Todd M. Litjen
Vice President
Marketing, North Region
Mark A. McQuade
Vice President
& General Counsel
Matthew J. Millard
Robert E. Anderson
Vice President
Business Development
Jeremy D. Carpenter
Vice President
Asset Management & Operations
O. Brad Cox
Vice President
Markets & Compliance
Keith E. Emery
Grant H. Davis
Managing Director
Jay M. Frisbie
Managing Director
Chris A. Leitner
Managing Director
Ryan T. Schroer
Managing Director
& Chief Financial Officer
John M. Gilbreath
Senior Vice President
Bradley K. Heisey
Vice President
Marketing
Senior Vice President
Mark G. Foreman
Vice President, General Counsel
& Chief Compliance Officer
Vice President
Trading
William W. Horton
Vice President
Risk Management
Jenni Z. Leger
Vice President
Real-Time Trading
Development
Gregory B. Kelly*
President
Barton D. Ford
Vice President
Timothy E. Hemig
David C. Dickey
Natural Gas Exploration
& Production
Tenaska Resources, LLC
Tom A. Boyd
Vice President
& General Manager
Ronald P. McGlade
Vice President
Midstream Infrastructure, Business
Development & Marketing
Power Generation
Nicholas N. Borman*
Managing Director
Distributed Solar Investments
Senior Vice President
Engineering & Construction
Stephen R. Johnson
Todd S. Jonas*
Vice President
John C. Parks
Joel M. Link
Vice President
Marketing, West Region
Vice President
Larry G. Carlson
David G. Rookstool
Robert A. Ramaekers
Vice President
Vice President
Environmental Affairs
Vice President
Back Office Operations
Mark D. Soulliere
Consultant & Retired Executive
Vice President
Origination
& Commercial Operations
Paul G. Smith*
Senior Managing Director
Vice President
Trading, North Region
Vice President
Credit Risk
Michael C. Lebens
Curry D. Aldridge
Daniel E. Lonergan*
Chief Executive Officer
& Senior Managing Director
Senior Vice President
Operations & Asset Management
Aaron O. Dubberly
Vice President
Asset Management
Andrew R. Jones
Vice President
Engineering
James B. Welniak
Vice President
Engineering & Construction
David T. Wingfield
Larry V. Pearson
Consultant & Retired Executive
30
TENASKA ANNUAL REPORT 2015
* Board Of Stakeholders
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
Vice President
Operations
31
OFFICES
& CONTACT INFORMATION
Corporate, Finance,
Power Generation
Tenaska Marketing Canada
Development
Calgary Office
Dallas Headquarters
Omaha Headquarters
3050, 300-5th Avenue Southwest
1701 East Lamar Boulevard, Suite 100
14302 FNB Parkway
Stock Exchange Tower
Arlington, Texas 76006-7320 USA
Omaha, Nebraska 68154-5212 USA
Calgary, Alberta T2P 3C4 Canada
Tel: 817-462-1500
Tel: 402-691-9500
Tel: 403-716-1387
Fax: 817-462-1510
Fax: 402-691-9526
Fax: 403-716-1375
Email: [email protected]
Website: Tenaska.com
Tenaska Marketing Ventures
Calgary
14302 FNB Parkway
Tenaska Power Services
Fax: 402-758-6274
Philadelphia
Denver
Pittsburgh
Dallas Headquarters
1701 East Lamar Boulevard, Suite 100
Arlington, Texas 76006-7320 USA
Boston Office
Tel: 817-462-1521
100 First Avenue, Suite 104
Fax: 817-303-3607
Charlestown, Massachusetts 02129-2043 USA
Website: TenaskaPowerServices.com
Tel: 617-580-8515
Omaha
Vancouver, British Columbia V6B 5LI Canada
Tel: 604-685-7890
Tel: 402-758-6101
Boston
320, 1122 Mainland Street
Omaha Headquarters
Omaha, Nebraska 68154-5212 USA
Vancouver
Vancouver Office
Fax: 857-241-3201
Tenaska Capital Management
Omaha Headquarters
14302 FNB Parkway
Omaha, Nebraska 68154-5212 USA
Tel: 402-691-9700
Fax: 402-691-9727
Email: [email protected]
Website: TenaskaCapital.com
Tenaska Resources
Dallas Headquarters
1701 East Lamar Boulevard, Suite 100
Arlington, Texas 76006-7320 USA
Philadelphia Office
Tel: 817-462-8051
Courtyard Building, Suite D-3
Fax: 817-423-7370
Dallas Office
3900 Skippack Pike
1701 East Lamar Boulevard, Suite 100
P.O. Box 1346
Arlington, Texas 76006-7320 USA
Skippack, Pennsylvania 19474-1346 USA
Tel: 817-303-1859
Tel: 215-857-5587
Fax: 817-764-6401
Fax: 215-857-5587
Pittsburgh Office
601 Technology Drive, Suite 100
Canonsburg, Pennsylvania 15317-8587 USA
Tel: 724-743-3800
Fax: 724-743-3900
Denver Office
1225 17th Street, Suite 2460
Seventeenth Street Plaza
Denver, Colorado 80202-5530 USA
Dallas
Tel: 303-723-9300
Fax: 303-723-9350
HEADQUARTERS
REGIONAL OFFICE
AFFILIATE HEADQUARTERS
32
TENASKA ANNUAL REPORT 2015
D E L I V E R I N G VA L U E I N E V O LV I N G M A R K E T S
33
14302 FNB Parkway
Omaha, Nebraska 68154-5212 USA
Tel: 402-691-9500
Fax: 402-691-9526
Email: [email protected]
Website: Tenaska.com