SOURCE: Cavallo Energy

Cavallo Energy

April 26, 2010 14:59 ET

Cavallo Cross Hudson Management LLC Announces Binding Open Season for New Transmission Capacity From New Jersey to New York

Cross Hudson Cable Offers Reserved Capacity for Firm, Point-to-Point Transmission Service

LINDEN, NJ--(Marketwire - April 26, 2010) - Cavallo Cross Hudson Management LLC, an affiliate of Cavallo Energy LLC, (Cavallo) today announced an Open Season for interested bidders to secure firm, point-to-point transmission service via the proposed Cross Hudson Cable Project (CHC). The CHC is an 8-mile 345 kV high voltage, alternating current (HVAC) electric transmission line, with associated appurtenant facilities, which will originate in Ridgefield, New Jersey, traverse under the Hudson River and terminate in Manhattan, New York at the West 49th substation owned by Consolidated Edison.

The Open Season will commence on Monday, May 17, 2010 and terminate on Friday, July 9, 2010. Bids must be received by 4:00 p.m. EST on Friday, July 9, 2010. To be eligible to receive reserved capacity in the open season, Cross Hudson must receive all bids on or before that deadline.

The $525 million Cross Hudson Cable Project will be capable of delivering 700 MW of generation and is expected to be in service by summer 2013. The Open Season will also include non-firm withdrawal rights from PJM to allow shippers to purchase power from PJM suppliers as well as other ancillary services to increase the reliability of delivering intermittent renewable energy supply sources to the New York City market.

"The Cross Hudson Cable project will be a tremendous asset to the energy and economic stability of New York City and the entire metropolitan region," stated Philip Gennarelli, President of Cavallo Energy LLC. "We believe the project meets important interests of both New York City customers to gain access to new energy supplies to enhance supply diversity, as well as to energy suppliers to gain access to the New York City and metropolitan energy market via this new transmission capacity."

Cavallo will host an Informational Meeting on Monday, May 17, 2010 at the Jersey City Hyatt, Jersey City, NJ. The meeting will be held from 1:30 p.m. - 4 p.m. The Information Meeting is open to those parties who meet the definition of Eligible Customer as set forth in PJM's FERC approved Open Access Transmission Tariff ("OATT"). Eligible customers must pre-register to participate in the Information Meeting. Pre-registration and further information will be made available on the Open Season Website, www.crosshudsoncable.com, which will be operational on or about May 10, 2010.

Potential bidders will need to pre-register online at www.crosshudsoncable.com after May 10, 2010. Those pre-registering must meet the Criteria for Registration in order to receive access to the information presented on the Web site and at the Information meeting. Those who meet the criteria but are not able be to attend the meeting in person will receive access to the Informational Meeting via a telephone bridge.

This Open Season offers reserved capacity, which will enable customers, upon commercial operations, to schedule long-term, firm, point-to-point transmission service on the transmission line, pursuant to an Open Access Transmission Tariff and a related pro forma Firm Transmission Scheduling Rights (TSR) Purchase and Service Agreement. Capacity will be auctioned in minimum units of 35 MWs, up to a total of 700 MWs. Bidders will be advised prior to the July 9, 2010 bid due date of the actual Available Capacity in advance of the date on which bids are due. Capacity for dynamic loading service above 700 MW and other ancillary services may also be auctioned.

Bidders are encouraged to submit multiple bids, including the price and number of minimum TSR units which they wish to purchase and the proposed contract terms for a minimum of five years to a maximum of twenty years per TSR unit. Cavallo has secured a third-party independent evaluation consultant to evaluate and rank bids according to overall value to Cross Hudson using a net present value of the expected revenue per MW and non-price criteria. Successful bidders will be notified by August 1, 2010. Detailed terms and conditions for the bidding process will be found at www.crosshudsoncable.com on or about May 10, 2010.

Interested parties will be required to sign a confidentiality agreement in order to participate in the Open Season and attend the bidder conference, which can be obtained upon email request to openseason@crosshudsoncable.com. Confidential project information and open season materials will be posted on a secure ShareFile web site via passwords which will be provided to interested parties on May 10, 2010 who have signed the confidentiality agreements.

Cavallo Energy will conduct the Open Season in a transparent, non-discriminatory process. Any entity wishing to secure long-term, point-to-point transmission rights on CHC may submit proposals for consideration.

For those attending in person, the hotel is located at 2 Exchange Place, Jersey City, New Jersey. Questions may be submitted anytime online at www.crosshudsoncable.com after May 10, 2010 or to the attention of Mark Viehman, VP Development at (908) 925-2224 or via email at msviehman@cavalloenergy.com.

About the Cross Hudson Cable Project
The Cross Hudson Cable Project, a proposed 345 KV electric transmission line from New Jersey to New York City, has been under development since 2001. CCH Holdings Group, LLC acquired the Project PSEG Power LLC in December 2006. Cavallo Cross Hudson Management Company LLC is the Manager of the Project. The proposed cable originates in Ridgefield, New Jersey at the Bergen Switchyard, owned by PSEG Power LLC (see Figure 1 below). The feed would terminate at the Consolidated Edison Company's substation at West 49th Street in Manhattan, supplying electricity to the New York City market and particularly Manhattan. The line will be installed on privately acquired right of way within New Jersey. It will run under the bed of the Hudson River, and make landfall in Manhattan at Pier 94. It will then run under ground under lands owned by the City and State of New York and beneath 12thAvenue into the Consolidated Edison's W.49thStreet substation. The line will be approximately eight miles in length and will be underground for its entire distance. The Project has obtained the key required permits including a New York State Public Service Commission Article VII Certificate (2003, amended 2004), and a U.S. Army Corps of Engineers Clean Water Act section 404/Rivers and Harbors Act section 10 permit (2004).

About Cavallo Energy LLC

Cavallo Energy LLC is a Houston-based developer and operator of renewable energy and delivery infrastructure in the US and international markets. Affiliates of Cavallo also provide retail service management to public retail customers of the State of Texas Power Program. Additional information can be found at www.cavalloenergy.com.

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