FERC grants waiver to Tenaska for 930-MW gas project in Pennsylvania

The Federal Energy Regulatory Commission on April 8 granted a waiver to Tenaska Inc. related to an in-development, 930-MW gas-fired project in Pennsylvania.

On Feb. 18, Tenaska had filed a request for a limited waiver of the procedural deadlines for a competitive entry exemption from the minimum offer price rule set forth in Attachment DD to the PJM Interconnection Open Access Transmission Tariff. Specifically, Tenaska sought, and has now been approved for, a waiver for the Westmoreland Generating Station for the May 2014 base residual auction for the 2017-2018 delivery year.

Under the PJM Tariff, a capacity market seller seeking an exemption or exception from the minimum offer price rule must submit its request, together with the required documentation and officer’s certification, no later than 135 days prior to the commencement of the offer period for the base residual auction in which it seeks to submit its sell offer. For the 2014 base residual auction, which is scheduled to commence on May 12, this translates into a deadline for exemption and exception requests of Dec. 28, 2013.

Tenaska, together with certain of its affiliates, developing the Westmoreland Generating Station, a 930-MW natural gas-fired facility to be located in South Huntington Township, Pa. Tenaska explained that, although no final decision has been reached to construct the station, it has determined that it is possible to achieve an in-service date prior to the 2017-2018 capacity delivery year, and has decided to continue developing the station to target that date. Tenaska said that, in order for the Westmoreland Station to become a realistic possibility from an economic perspective, the capacity would need to clear in PJM’s 2014 base residual auction for the 2017-2018 delivery year, which might not occur without a minimum offer price rule exemption.

Tenaska stated the requested waiver is necessary to address a specific problem, namely, Tenaska’s inability to obtain a minimum offer price rule exemption for the Westmoreland Station and the associated risk of its capacity not clearing in the 2014 base residual auction. Tenaska said that, if the capacity of the Westmoreland Station does not clear the 2014 base residual auction, further project development would be, at a minimum, delayed, or ended altogether.

FERC ruled: “Tenaska’s failure to timely submit its request for a competitive energy exemption was inadvertent and was due, in part, to Tenaska’s uncertainty about whether the Westmoreland Station could be in service by the 2017-2018 delivery year. Tenaska’s request is limited in scope in that Tenaska seeks a waiver of the procedural deadlines contained in sections 5.14(h)(9)(ii) and 5.14(h)(9)(iii) of the Tariff for one auction only, and the waiver would be applicable only to Tenaska’s own request for a competitive entry exemption. Tenaska’s request remedies a concrete problem, as the Westmoreland Station would not be eligible for a minimum offer price rule exemption without receiving such waiver. We further find that granting the waiver will have no undesirable consequences for PJM or any other third parties. Neither PJM, nor any other entity, opposes the requested waiver.”

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.