North Carolina solar developers respond to Dominion arguments on QF issues

North Carolina solar project developers Community Energy Solar LLC, Community Energy Renewables LLC and nine affiliated entities asked the Federal Energy Regulatory Commission on Jan. 14 to reject an effort by Virginia Electric and Power d/b/a Dominion Virginia Power to get out of Public Utility Regulatory Policies Act (PURPA) obligations to buy power from their projects.

The utility has sought from FERC a determination that DVP is not required to enter into a new contract or new obligation to purchase electric energy and capacity from each of nine solar qualifying facilities (QFs) being developed by Community Energy for interconnection with DVP’s North Carolina retail distribution facilities.

“The Commission’s Regulations implementing PURPA Section 210(m) place a substantial burden on an electric utility seeking to terminate its mandatory purchase obligation, which has long been a key under PURPA to assuring development of small renewable resources,” the developers noted. “A utility must prove that QFs lack nondiscriminatory access to markets of which the utility is a member. For small QFs (of 20 MW or less), the Regulations establish a rebuttable presumption that they lack nondiscriminatory access even to organized markets such as PJM. This presumption is intended to protect small QFs, such as the Solar QFs, that seek interconnection at the distribution level and that could face substantial physical constraints requiring customer-funded upgrades or other obstacles and administrative burdens that, ‘in practice’ would impede their actual access to PJM wholesale markets.”

They said that DVP’s application should be rejected on three independent grounds:

  • First, the application does not make the required project-specific showings or contain necessary documentation to prove that the Solar QFs will “in practice” have actual access to PJM markets without facing physical constraints, upgrade costs, or other obstacles and administrative burdens.
  • Second, if DVP were relieved of its mandatory purchase obligation, the Solar QFs will not have actual access to PJM in an economically viable and timely manner due to distribution and other constraints on the DVP system, prohibitive timing concerns associated with the mechanics of the PJM interconnection process, and other substantive administrative barriers and obstacles.
  • Third, DVP has existing contract, tariff and regulatory “legally enforceable obligations” to the Solar QFs that are grandfathered from termination of the mandatory purchase obligation. 

The nine affiliated entities joining this answer (called the “Solar QF Owners”) are: Tarboro Solar LLC, Aulander Solar LLC, Woodland Solar LLC, Winton Solar LLC, Garysburg Solar LLC, Gaston Solar LLC, Seaboard Solar LLC, Jamesville Solar LLC, and Weldon Solar LLC. Each QF facility will have a rating of either 5 MW or 4.99 MW. Each of the Solar QF Owners is currently wholly-owned by Community Energy Renewables, which is a holding company that does not have employees. Project development of each of the facilities is being conducted by Community Energy Solar, pursuant to a Development Services Agreement with its affiliate, Community Energy Renewables.

“Each of the Community Energy QFs is under 20 MWs, under development, and is undergoing the studies necessary to interconnect with Dominion Virginia Power’s distribution system,” the utility said in its Oct. 31, 2014, FERC filing. “This application seeks termination of the purchase obligation under PURPA for each of the Community Energy QFs separately, and does not seek a blanket waiver of Dominion Virginia Power’s QF purchase obligation.

“In support of its application, Dominion Virginia Power demonstrates that (1) each of the Community Energy QFs is an affiliate of Community Energy, Inc., a sophisticated market participant that has significant experience with the PJM Interconnection LLC (‘PJM’) markets; (2) each of the Community Energy QFs has nondiscriminatory access to the wholesale markets of PJM; and (3) there are no operational constraints, transmission, distribution, or interconnection issues that would prevent any of the Community Energy QFs from participating in the PJM markets.

“Dominion Virginia Power should be relieved from the obligation to purchase power from each of the Community Energy QFs because they each have nondiscriminatory access to the types of energy and capacity markets described in Section 292.309(a)(1) of the Commission’s regulations: (i) independently administered, auction-based day ahead and real time wholesale markets for the sale of electric energy; and (ii) wholesale markets for long-term sales of capacity and electric energy.”

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.