Virginia Electric and Power d/b/a Dominion North Carolina Power told the North Carolina Utilities Commission on Sept. 4 that it is willing to engage in “free, open and good faith negotiations” with SunEnergy1 LLC on a 15-year power purchase agreement (PPA).
The utility filing was in response to a complaint from SunEnergy1 that Dominion was not negotiating in good faith for power from a 20-MW (AC) solar photovoltaic facility that it plans to build at Scotland Neck in Halifax County. On July 30, the commission approved a certificate of public convenience and necessity (CPCN) for this project.
Dominion North Carolina Power, which is a unit of Dominion Resources (NYSE: D), explained that the disagreement with the solar developer is over avoided cost energy and capacity rates for this qualifying facility (QF).
For one thing, Dominion said that the developer is asking for avoided cost rates under Schedule 19-FP, which it said is for QFs under 5 MW in size, making the SunEnergy1 project too large to fall under this schedule.
Also, Dominion said the developer is asking for avoided cost payments dating back to November 2012, when the developer first got into contact with Dominion, while Dominion says that the regulations require the payment period to begin July 30, when the CPCN was issued by the North Carolina commission.
SunEnergy1 is asking the commission to arbitrate this dispute. It told the commission that it had been negotiating with Dominion on a 15-year PPA since about the third quarter of 2012. But suddenly, after long negotiations and a decision by the developer in the meantime to commit money to its project in order to meet a project completion target of the end of this year, the utility in July came in with a rate proposal that was much lower than what was being negotiated, said SunEnergy1.