FERC grants waiver related to shutdown of Portsmouth Genco coal plant

The Federal Energy Regulatory Commission on April 22 granted a waiver to Portsmouth Genco LLC related to the planned shutdown this summer of its coal-fired Lake Kingman power plant in the Norfolk area of southeast Virginia.

On March 23, Portsmouth Genco requested a waiver of the preliminary must-offer exception request deadline set forth in Section 6.6 of Attachment DD of the PJM Interconnection Open Access Transmission Tariff. Portsmouth sought the waiver for its 115-MW generating facility, which will be decommissioned in 2015, for the Base Residual Auction (BRA) commencing May 2015 for the 2018/2019 Delivery Year. Portsmouth requested that the commission grant the requested waiver by no later than April 22 so that PJM may have time to review the request before the BRA commences on May 11.

Section 6.6(g) of Attachment DD to the PJM Tariff sets forth the terms and conditions that govern the auction for the solicitation of Capacity Resources in the PJM Region. PJM’s tariff requires that a capacity market seller seek approval for an exception to the must-offer requirement in the PJM Reliability Pricing Model auction by submitting a written request to the Market Monitoring Unit (MMU) and the PJM Office of Interconnection, provided it can establish that the resource “is reasonably expected to be physically unable to participate in the relevant auction.”

Portsmouth explains that it and its then-business partner Northern Virginia Electric Cooperative, in accordance with Section 6.6, submitted a timely preliminary must-offer exception request in August 2014. As part of the decommissioning of the facility, Northern Virginia Electric Cooperative’s rights were terminated in January 2015, at which point Portsmouth took over sole responsibility for reviewing the facility’s legal obligations. Subsequently, Portsmouth discovered that PJM had denied the exception request on procedural grounds, “for failure to respond to a request from PJM for additional supporting documentation,” which Portsmouth states it “was not previously aware of.” Portsmouth claimed that it has since been working diligently and in good faith to correct this error, and that it will provide all necessary supporting documentation to PJM and the MMU.

Portsmouth contends that its request has been filed early enough to allow PJM and the MMU sufficient time to review the substance of Portsmouth’s exception application on the merits prior to the BRA commencing May 2015 for the 2018/2019 Delivery Year. Portsmouth was also “authorized to represent that PJM and the MMU do not oppose this request.”

Notice of Portsmouth’s filing was published March 23, and corrected on March 24, with no protests or interventions filed.

“We find good cause to grant the request for waiver,” said FERC’s April 22 approval. “Section 6.6(g) of Attachment DD authorizes a Capacity Market Seller to file for a Commission order that grants an exception or waiver in the event of a missed deadline. Portsmouth states that it made an administrative error in failing to meet the deadline, and made good-faith efforts to correct that error promptly. We also find it appropriate to grant this one-time waiver of the deadline for submitting a preliminary must-offer exception request for the 2018/2019 Delivery Year for Portsmouth’s Facility because of the limited scope of the request and because the waiver will allow PJM to review Portsmouth exemption request prior to the BRA commencing May 2015 for the 2018/2019 Delivery Year. We further find that granting the waiver will have no undesirable consequences for PJM or any other third parties, and note that PJM and the MMU authorized Portsmouth to state that neither one opposes the requested waiver.”

A company contact is: Jacob A. Pollack, Senior Vice President, General Counsel, Cogentrix Energy Power Management LLC, 9405 Arrowpoint Boulevard, Charlotte, NC 28273, Tel (704) 525-3800, jacobpollack@cogentrix.com.

Said the Cogentrix website about this plant: “The Portsmouth Genco, LLC facility is an upgraded version of the plant originally developed and constructed by Cogentrix in 1988. The plant is a nominal 110 MW under-feed stoker coal-fired cogeneration facility located in Portsmouth, Virginia along the banks of the Elizabeth River. Although originally designed and commissioned as a cogeneration plant, Portsmouth no longer has customers for its cogenerated steam. All of the plant output is dedicated to generating electricity, which is delivered to Northern Virginia Electric Cooperative (NOVEC).” Notable is that the NOVEC contract is now over, thus the need to shut the plant.

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.