On July 16, the Federal Energy Regulatory Commission accepted market-based rate authority for Chestnut Flats Lessee LLC, which is taking over a 38-MW wind project in Pennsylvania that went into service in December 2011.
On June 6, Chestnut Flats Lessee field an application for market-based rate authority with an accompanying tariff. The proposed market-based rate tariff provides for the sale of energy, capacity, and ancillary services at market-based rates. Chestnut Flats Lessee also requested waivers commonly granted to similar market-based rate applicants.
Chestnut Flats Lessee will operate a 38-MW wind facility located in Blair and Cambria counties, Pa. Chestnut Flats Lessee is indirectly wholly owned by EDF Renewable Energy (EDF-RE), which is ultimately owned by Électricité de France, S.A. EDF-RE and its affiliates will own a total of control 1,773 MW of capacity in the PJM Interconnection market.
Chestnut Flats Lessee was created to manage and operate the 38-MW (nameplate) facility as part of a sale/leaseback financing transaction so that operational control will be retained by an entity owned by EDF-RE. The facility includes limited interconnection facilities necessary to connect it with a 115-kV substation owned by Pennsylvania Electric (Penelec), and the transmission system operated by PJM. All of the output of the facility is sold under a long-term power purchase agreement to Delmarva Power & Light. Chestnut Flats Wind received market-based rate authorization from the commission in 2010.
The June 6 filing noted that Chestnut Flats Lessee and its affiliates currently control, as that term is defined in the generation interconnection process, two sites other than the site on which the current facility is constructed that could potentially support 200 MW of renewable generation in the PJM balancing authority area. Although Chestnut Flats Lessee’s affiliates do own or control a site for developing renewable generation capacity in the relevant geographic market, the sites are not located in an area that has a scarcity of similar alternative sites for market entrants, so there is no barrier to entry, the company added.