NextEra in dispute with California ISO over solar interconnect costs

NextEra Desert Center Blythe LLC on Feb. 18 filed with the Federal Energy Regulatory Commission a complaint against the California ISO related to their dispute over an interconnection project related to a 250-MW solar project that is already on-line, and another that will be in the future.

“The Complaint asks this Commission to order CAISO to allocate to Desert Center the Congestion Revenue Rights (‘CRRs’) created by Desert Center’s investment in the Interim West of Devers transmission project (‘IWOD Project’), as required by Section 36.11 of the CAISO Market Redesign and Technology Upgrade Tariff (‘Tariff’ or ‘CAISO Tariff’) relating to Merchant Transmission CRRs and by Guideline 3 of Order No. 6811—which state that congestion rights should be allocated to any party that pays for transmission upgrades without reimbursement from transmission customers,” said the filing. “In the alternative, if the Commission determines that the CAISO Tariff does not require CAISO to allocate to Desert Center the CRRs created by Desert Center’s investment in the IWOD Project, the Commission should rule that the CAISO Tariff is unjust, unreasonable and unduly discriminatory under section 206 of the [Federal Power Act] and that the Tariff should be revised to allow Desert Center to receive CRRs for paying the full construction and maintenance costs of the IWOD Project.

“CAISO previously stated that it may include the IWOD Project in its 2016 annual CRR auction and allocation to load serving entities, which will occur in the summer of 2015. However, CAISO subsequently explained to Desert Center that, because it cannot unwind CRRs once allocated to a party, it intends to refrain from allocating CRRs from the IWOD Project to any entity until after the Commission rules on this Complaint. Desert Center asks the Commission to issue its ruling on this Complaint by June 1, 2015, so that CAISO will be able to allocate the CRRs from the IWOD Project in accordance with its 2016 annual CRR auction and allocation process.”

Desert Center is a wholly-owned subsidiary of Genesis Solar LLC and McCoy Solar LLC, which are indirect subsidiaries of NextEra Energy Resources LLC. Certain interests in Genesis and Desert Center are held by NextEra Energy Partners LP, a publicly-traded “yieldco.”

Desert Center is the interconnection customer under a large generator interconnection agreement (LGIA) among Desert Center, CAISO and Southern California Edison (SCE). The LGIA governs the interconnection to the CAISO-controlled grid, at SCE’s Colorado River Substation, of Genesis’ 250-MW solar plant near Desert Center, California, and of McCoy’s 250-MW solar plant near Blythe, California. Desert Center was formed for the purpose of serving as the interconnection customer to enable the Genesis and McCoy projects to interconnect to a single point at the Colorado River Substation. The interconnection arrangement and Genesis’ and McCoy’s combined 500 MW solar facilities are collectively referred to as the “Genesis McCoy Solar Project.”

Genesis and McCoy have entered into long-term power purchase agreements (PPAs) for the sale of the output from their solar plants. Genesis has entered into a PPA with Pacific Gas and Electric (PG&E) for sales that began in November 2013. McCoy has entered into a PPA with SCE for sales commencing no earlier than December 2016.

The West of Devers Upgrades initially were projected to be completed in 2017. However, these upgrades have been delayed several times, and the current estimated completion date for these upgrades is now beyond the year 2020, the compaint said.

“After evaluation and study, CAISO and SCE identified the IWOD Project as an interim solution,” said the complaint. “The IWOD Project consists primarily of the installation of (1) four series reactors on the four existing 220 kV transmission lines out of SCE’s Devers Substation, and (2) a special protection scheme (‘SPS’) that would curtail generation and, if necessary, load, under certain conditions. The IWOD Project would temporarily mitigate deliverability constraints on SCE’s West of Devers transmission corridor and provide approximately 1,050 MW of additional deliverability capacity to Desert Center and the other generators in its cluster—until the West of Devers Upgrades are completed.” 

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.