Gaelectric loses FERC decision over Montana wind project

The Federal Energy Regulatory Commission on Aug. 6 denied a complaint filed by Gaelectric LLC and Jawbone Wind Farm LLC (jointly called “Gaelectric”) against NorthWestern Corp.

FERC also denied Gaelectric’s limited request for waiver of section 17.7 of NorthWestern’s Open Access Transmission Tariff (NorthWestern OATT).

Gaelectric USA Ltd., through subsidiaries including Gaelectric LLC and Jawbone, develops renewable power generation and energy storage projects throughout the United States. Jawbone is a special purpose entity created to develop a 460-MW wind project (called the Jawbone Project) in Wheatland County, Montana.

Northwestern owns and operates electric and gas transmission and distribution facilities primarily located in Montana and South Dakota. It provides transmission service over its Montana transmission facilities under the NorthWestern OATT.

Gaelectric is planning to develop the Jawbone Project, with the goal of moving the electric output of the project to the point of interface between the NorthWestern and Bonneville Power Administration (BPA) transmission systems. Gaelectric states that, in March 2010, it submitted 14 transmission service requests to NorthWestern for 460 MW of transmission service, with commencement of service dates split between October 2014 and October 2015. Gaelectric said it subsequently withdrew some of its requests, but that requests for full transmission service remain in the BPA process queue and were originally expected to commence service in late 2015.

Gaelectric explained that, upon submitting the 14 transmission service requests for 460 MW to NorthWestern, Gaelectric notified NorthWestern that the requests were for one wind project, the Jawbone Project, and asked that the requests be studied in a cluster.

Gaelectric said that NorthWestern ultimately separated its 460 MW of transmission service requests into three separate transmission service offers, with each offer of transmission service different from the others with respect to material terms such as rate calculation and commencement of service. NorthWestern made the first offer of transmission service in three transmission service agreements (TSA) tendered to Gaelectric in September 2012, which together provided for 130 MW of firm service, the amount that could be offered without the need for transmission upgrades.

Gaelectric asserted that, if it had not accepted the 130 MW TSA offered by NorthWestern, this capacity would have been offered to lower-queued transmission service requests. Gaelectric said the next requests in the queue were also Gaelectric requests. Thus, Gaelectric stated that if it did not accept the 130 MW TSA, it would have been deemed to have withdrawn all of its transmission service requests for the Jawbone Project.

NorthWestern said that the complaint should be denied because Gaelectric has not shown that the 130 MW TSA resulted from a violation of the NorthWestern OATT.

  • First, NorthWestern reiterated that the commission has held that, if a customer rejects an offer of partial service under section 19.7 of the pro forma OATT, the transmission customer will lose its place in the queue. NorthWestern argued that the commission found this to be necessary to prevent a customer’s request from tying up the firm use of available transfer capability for an indefinite period of time.
  • Second, NorthWestern reiterated that Gaelectric did not make a single request for 460 MW, but instead made 14 separate requests, ranging between 15 and 50 MW. NorthWestern stated that Gaelectric was obligated to accept at least 100 MW of the first two transmission service requests, the amount provided without contingencies or the constructions of upgrades, or withdraw its request from the queue.
  • Finally, NorthWestern pointed out that Gaelectric has failed to rebut evidence that Gaelectric signed the 130 MW TSA voluntarily.

FERC in its Aug. 6 decision found that the 130 MW TSA is consistent with both the pro forma OATT and the NorthWestern OATT, and is just and reasonable. Accordingly, it denied Gaelectric’s complaint pertaining to modification of the 130 MW TSA.

FERC added: “Gaelectric’s claim that good cause exists to grant a waiver is based primarily on its contention that the 130 MW TSA was tendered in violation of the NorthWestern OATT and the fact that Gaelectric will not be able to take service on October 1, 2014, as designated in the 130 MW TSA, due to the unavailability of transmission over BPA’s transmission system. As discussed above, we find that NorthWestern did not tender the 130 MW TSA in violation of its OATT. Accordingly, we do not find that the situation involves an emergency or unintentional error which could justify a 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.