Duke Energy Progress argues QF obligations for several solar projects

Duke Energy Progress on April 17 filed arguments with North Carolina Utilities Commission on why it thinks it there shouldn’t be any waiver of “legally enforceable obligations” requirements for several small solar projects trying to win power purchase agreements with the utility.

The project companies are WBJE Solar LLC, Pridgen Solar Group LLC, Double R Solar LLC, Southside Solar LLC, Son Power LLC, Merritt Energy Partners LLC, 6 Acre Field LLC, 4-Lane Solar LLC and GTOP Merritt Solar. They want waivers of the requirement to obtain legally enforceable obligations (LEOs).

Said Duke Energy Progress: “The Federal Energy Regulatory Commission (‘FERC’) established the concept of a legally enforceable obligation as part of its rules implementing the requirements of the Public Utility Regulatory Policies Act of 1978 (‘PURPA’). Section 292.304(d) 1 of these rules provides qualifying facilities (‘QFs’) with two options. First, the QF can provide energy as available from the QF to the purchasing utility for purchase at the purchasing utility’s avoided costs calculated at the time of delivery. Alternatively, the QF can provide energy or capacity pursuant to a legally enforceable obligation (‘LEO’). If the QF chooses to provide energy or capacity through a LEO, the QF can then choose whether the purchasing utility pays avoided costs calculated at the time of delivery, or avoided costs calculated at the time the obligation is incurred.

“Clearly, under PURPA, a QF does not need a LEO to sell energy at avoided cost. A LEO is not a legal requirement. A LEO is rather a mechanism that a QF can use to exercise a different payment option if it meets certain qualifications. Even if those qualifications are not met, the Applicants have the option to sell energy as available. Thus, by their letters, the Applicants apparently are asking this Commission to waive a requirement that does not exist in the first place. While the Applicants refer to an exception for the requirement for a LEO, the letters filed by the Applicants are not particularly clear. Rather than asking for a waiver of the ‘LEO requirement,’ the Applicants instead seem to be asking for a waiver to the Commission’s requirement that they obtain a Certificate of Public Convenience and Necessity (‘CPCN’) to establish a LEO. The Commission should deny this request.”

These are small solar projects typical of dozens that have been in play in North Carolina in recent months. For example, WBJE and Pridgen are both developing 4.99-MW projects in Columbus County, N.C.

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.