The American Wind Energy Association (AWEA) moved on July 26 at the Federal Energy Regulatory Commission in a case involving Arizona Public Service (APS) and the ability of renewable energy development companies to develop power in competition with APS.
AWEA asked for rehearing of the commission’s June 27 order dismissing a complaint filed by affiliates of Terra-Gen Power LLC (TGP) against APS. “The Order erroneously concluded that APS’ recent revision to the credit requirements in its Open Access Transmission Tariff (‘Tariff’) is not unjust and unreasonable,” AWEA said.
APS’ revised credit requirement will disproportionately impact independent renewable generation developers that do not meet APS’ creditworthiness criteria at the time they submit their transmission service requests, the association said.
“By contrast, a utility constructing renewables would generally be considered creditworthy and would not be required to comply with the new requirement,” it added. “Moreover, an independent renewable developer in the real world would not typically be in a position to post such a substantial amount of collateral when it submits a transmission service request. As a result, APS’ new credit requirement will have a significant chilling effect on new generation development within the APS territory. The impact of the requirement will be to force projects, including viable projects that would ultimately be placed into service, to exit the transmission queue (or decide not to enter the queue at all) because they do not have the necessary liquidity to post such substantial security at the very beginning of the development process.”
APS has provided no justification for the revision other than to claim, without providing any support, that the requirement is necessary to prevent speculative projects from adversely impacting the transmission queue, the wind association said. “AWEA is deeply concerned about the precedent that would be set by permitting a transmission provider to justify a particular Tariff provision by claiming it is necessary to prevent queue clogging while providing no evidence that speculative projects are in fact a problem in its territory or that the provision is narrowly-tailored to address that concern, and without engaging the relevant stakeholders in a transparent process to ensure that the provision will not unnecessarily impede the development of viable projects,” AWEA added.