FERC grants waiver to Invenergy for 600-MW gas project

The Federal Energy Regulatory Commission on April 25 granted a waiver to Invenergy Nelson LLC related to the company’s 600-MW, gas-fired power project in Illinois.

On March 12, Invenergy Nelson filed a petition for waiver of the must-offer requirement in section 6.6(g) of Attachment DD to the PJM Interconnection Open Access Transmission Tariff, in order to offer less than the full amount of its 600 MW facility in the May 2014 Base Residual Auction for the 2017-2018 Delivery Year. Specifically, Nelson sought waiver of the deadlines to request a partial exception to its must-offer requirement for the May 2014 Auction.

Nelson is developing the Nelson Facility, a 600 MW combined-cycle gas turbine generating facility within PJM, which is expected to go into operation in 2015. The Nelson Facility was offered into and cleared the PJM Auction for the 2016-2017 Delivery Year. Therefore, the Nelson Facility is considered an Existing Generation Capacity Resource under the PJM Tariff and is required to offer its capacity into the May 2014 Auction for the 2017-2018 Delivery Year, unless it is granted an exception.

Nelson asserted that it qualifies for a partial exception to the must-offer requirement to allow it to remove 15.6% (approximately 90 MW) of the 600 MW capacity of the Nelson Facility from the May 2014 Auction because it has entered into a financially and physically firm commitment to sell that portion of its capacity to a load-serving entity external to PJM. On March 12, it executed an agreement with WPPI Energy under which WPPI Energy will purchase 15.6% of the Nelson Facility’s output for a 20-year term beginning on June 1, 2017. WPPI Energy serves loads in the Midcontinent Independent System Operator region.

Because Nelson missed the Jan. 12, 2014 deadline for requesting an exception under the PJM Tariff, Nelson requested the commission grant a waiver to allow for a partial exception from the must-offer requirement. Nelson stated that the error was made in good faith because it did not yet have a firm commitment for the external sale to WPPI Energy until after the Jan. 12 deadline and it submitted its request for waiver promptly thereafter.

PJM’s Market Monitor had objected to the waiver request, but FERC responded in the April 25 order: “While we appreciate the Market Monitor’s concern regarding the contract execution after the January 12, 2014 deadline, we do not believe that this warrants rejecting the waiver in this case. Given the overall size of the PJM market, 90 MW is a relatively small amount of capacity. Therefore, granting the waiver would only have a similarly de minimis effect on the capacity in PJM’s May 2014 Auction. Also, no protestor demonstrated that the capacity amount or waiver, if granted, would harm the market.”

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.