FERC grants break for 735-MW Keys Energy Center project in Md.

The Federal Energy Regulatory Commission on March 4 issued a waiver needed by Keys Energy Center LLC due to a mismatch of timing for a PJM Interconnection auction and when its 735-MW power plant in Maryland will come online.

On Jan. 29, Keys Energy Center filed a petition for a waiver of the Competitive Entry Exemption deadline of the Open Access Transmission Tariff of PJM. In particular, Keys Energy sought a waiver of the Dec. 28, 2013, deadline for its electric generating plant for the Base Residual Auction commencing May 2014 and for the 2017/2018 Delivery Year.

PJM secures capacity commitments under the Reliability Pricing Model through a Base Residual Auction, held three years before a Delivery Year. A Capacity Market Seller can seek to qualify for an exemption to the minimum offer price rule (MOPR) for an upcoming Base Residual Auction by submitting a written request, along with supporting data and documentation to the Market Monitoring Unit (MMU) and PJM’s Office of Interconnection.

In addition to fulfilling the substantive criteria for a Competitive Entry Exemption, the Capacity Market Seller must submit the exemption request at least 135 days before the commencement of the offer period for the Base Residual Auction in which the Capacity Market Seller seeks to submit its offer. For the May 2014 Base Residual Auction, the deadline for the Competitive Entry Exemption was Dec. 28, 2013.

Keys Energy is developing a 735 MW two-on-one combined-cycle, natural gas-fired plant in Prince George’s County, Md. Keys Energy stated that last year, the project received approval from PJM and MMU to participate in the May 2013 Base Residual Auction, but Keys Energy did not actually participate due to permitting delays. Keys Energy stated that the plant will be operational in April 2017 if it can participate in the upcoming May 2014 Base Residual Auction and closes on construction financing this summer.

Keys Energy was approved by FERC for a waiver of the 135-day deadline in the PJM Tariff to allow PJM’s Office of Interconnection and the MMU to consider its request for a Competitive Entry Exemption. “Acknowledging that it missed the deadline for submission of the written request for Competitive Entry Exemption, Keys Energy argues that there is good cause to grant waiver,” FERC noted. “Keys Energy claims that the error was made in good faith because the Competitive Entry Exemption is a new Tariff rule, approved in May 2013, and that Keys Energy was not aware until January 22, 2014, that it would need to file a timely request in order to be considered for a Competitive Entry Exemption.”

The commission ruled: “Keys Energy’s error was made in good faith because the Competitive Energy Exemption is a new categorical exemption made possible by the most recent MOPR requirements. Keys Energy’s request is limited in scope in that Keys Energy only seeks a one-time waiver of the deadline in one PJM Tariff provision. Keys Energy’s request remedies a concrete problem because, without the waiver of the deadline, the project would not be able to seek an exemption and thus would only be able to bid at a floor price or higher. The waiver should, moreover, not have undesirable consequences such as harming third parties. In this regard, Keys Energy states that the request for waiver is unopposed and estimates that the plant will become operational in April 2017 if it can participate in the May 2014 Base Residual Auction and close on construction financing this summer. Keys Energy states, in fact, that it has been authorized by both PJM and the MMU to state that they do not oppose the petition.”

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.