FERC on Sept. 7 issued an order granting Clean Line Energy the authority to charge negotiated rates on its $3.5bn Plains & Eastern transmission project.
Clean Line Energy on June 29 requested from FERC authorization to charge negotiated rates for its 800-mile, 600-kV HVDC project (Docket No. ER12-2150-000).
The company’s application passed FERC’s four-factor analysis for evaluating negotiated rate applications: the justness and reasonableness of rates; the potential for undue discrimination; the potential for undue preference, including affiliate preference; and regional reliability and operational efficiency requirements, FERC said.
The merchant transmission developer requested permission to contract up to 75% of Plains & Eastern’s 3,500 MW capacity to anchor tenants. The remaining 25% of capacity will be sold through an open season.
“As applicants point out, they must secure long-term commitments from creditworthy anchor customers to support financing the project,” FERC said in the order. “We have approved similar requests to allocate capacity to anchor customers in the past in light of the difficulties in financing merchant transmission projects.”
FERC’s approval is conditioned on the company making an informational filing for any anchor customer transaction, describing the terms of the agreement and the relevant facts and circumstances leading to the agreements no later than 30 days after the end of the open season, FERC said.
Clean Line must also submit reports on the open season process within 30 days after it closes, including information about the terms of the open season, which parties purchased capacity, and the amount, term and price of the capacity, FERC said.
The merchant developer must also file, upon completion of the project, an open access transmission tariff (OATT) administered by the qualified entity to which they hand over operational control or a rate schedule in the entity’s OATT. Clean Line is expected to hand over operational control of the project to the Southwest Power Pool (SPP).
Plains & Eastern is being planned in two phases, and is designed to transport renewable energy from the “wind belt” in the Midwest to load centers in the eastern United States, according to TransmissionHub data.
The project, which has a capacity of up to 7,000 MW, will originate at Diamond substation, Okla., and terminate at Memphis substation, Tenn.