Due to a dispute over when legally enforceable obligations (LEOs) were established, several solar project development affiliates of Ecoplexus Inc. filed on April 10 a complaint at the North Carolina Utilities Commission against Virginia Electric and Power d/b/a Dominion North Carolina Power.
Those affiliates that filed the complaint are Fresh Air Energy XXV LLC, Fresh Air Energy XXXIII LLC, Fresh Air Energy XIX LLC, Fresh Air Energy II LLC and Fresh Air Energy XXVII LLC. They are developers of solar photovoltaic (PV) generating facilities in various locations in North Carolina. They are all affiliates of Ecoplexus, which has a principal place of business located in San Francisco, California.
Their projects are:
- Fresh Air Energy XXV, Vaughn’s Creek PV1, 19.99 MW;
- Fresh Air Energy XXXIII, Grandy PV1, 19.99 MW;
- Fresh Air Energy XIX, American Legion PV1, 16.5 MW;
- Fresh Air Energy II, Turkey Creek PV1, 13.5 MW; and
- Fresh Air Energy XXXVII, Pleasant Hill PV1, 12 MW.
Because each of these facilities has a nameplate capacity in excess of 5 MW, a power purchase agreement and rates for the purchase of the electrical output must be negotiated for each facility. The company said that the state commission has previously ruled that a legally enforceable obligation exists when: a qualifying facility (QF) has received a certificate of public convenience and necessity (CPCN); and the QF has committed to sell its generation to the utility.
These companies said they have elected to sell their output to Dominion North Carolina Power (DNCP) at rates based on DNCP’s avoided costs calculated at the time the LEO was created. However, a dispute exists between them and DNCP as to the date on which the LEOs were created. The dispute centers on the point in time at which the development companies committed to sell electrical output to the utility.
The development companies say the LEO for each project was established at varying times in the June-October 2014 period. “Upon information and belief, DNCP takes the position that the LEO for each Facility was created no earlier than February 26, 2015, which is the date on which Ecoplexus representative Erik Stuebe sent an email to DNCP representative Roger Williams to initiate the PPA negotiation process,” the companies said. “Mr. Stuebe did not receive a response to that email until March 18, 2015, at which point another DNCP representative, John Hampson, indicated that ‘LEO forms’ would be required for those facilities for which [power purchase agreements] must be negotiated.”
They added: “Worth pointing out is the fact that each of the Facilities was identified in a filing made by Virginia Electric and Power Company on December 19, 2014 to the FERC as being QFs in the company’s North Carolina service territory that are potentially affected by the company’s pending application to the FERC to terminate its mandatory purchase obligation in that same docket. … Clearly, as of December 19, the company had taken sufficient notice of the steps undertaken by the LLCs toward the development of the Facilities—i.e., the commitments to generate electrical output to be sold to DNCP—to identify them to the FERC as being potentially affected by its application to terminate its PURPA obligation.
“The date of the LEO has consequences for the rates offered by the utility to the QF. As the utility’s avoided costs change over time, so will the rates offered. Upon information and belief, the date the LEO was created has a material effect on the rates that will be offered to the LLCs by DNCP, based on the filing made by the utility on March 2, 2015 in N.C.U.C. Docket No, E-100, Sub 140. However, to date, despite the request made by Mr. Stuebe on February 26, 2015, DNCP has provided neither rates nor draft PPAs to initiate the negotiation process. Although Mr. Stuebe and Ecoplexus have previously negotiated and entered into three PPAs with DNCP, Complainants have been informed that DNCP is currently revising the form PPA offered to QFs larger than 5 MW, which will not be available for several more weeks. In the interest of time and efficiency, the Complainants respectfully request that the Commission find that the steps taken by the LLCs toward the development of the Facilities constitute a commitment to sell electrical output to the utility and declare that the LEO was created for each Facility on the date of issuance of the CPCN.”
DNCP is a subsidiary of Dominion Resources (NYSE: D).