FERC rejects Northern States Power request over QF obligations for hydro project

The members of the Federal Energy Regulatory commission on Sept. 17 upheld a May 14 order that rejected a request by Northern States Power-Minnesota (NSPM) to let it out of an obligation to buy power from a hydroelectric project.

On Feb. 18, NSPM, a subsidiary of Xcel Energy (NYSE: XEL), filed an application under the Public Utility Regulatory Policies Act of 1978 (PURPA) and the commission’s regulations, seeking termination of its obligation to purchase electric energy and capacity from an interconnecting run-of-the-river hydroelectric qualifying facility (QF) with a net capacity of 17.92 MW owned by Twin Cities Hydro LLC. In a May 14 order, the commission denied NSPM’s application, and on Sept. 17 rejected the utility’s rehearing request.

In the May 14 order, the commission concluded that NSPM had not met its burden of proof to be relieved of its PURPA mandatory purchase obligation with respect to the Twin Cities QF. The commission pointed out that NSPM acknowledged in its answer that the Twin Cities QF presently cannot access the Midcontinent ISO capacity market and has no history of sales into the MISO capacity market.

Moreover, the May 14 order noted that NSPM’s own witness acknowledged that, if the Twin Cities QF were to submit an interconnection service request, it would more than likely be conditional, due to pending completion of several transmission network upgrades in the MISO, and accordingly would not qualify the Twin Cities QF to participate in the MISO capacity market. The May 14 order noted that this limited access is the result of constraints on the MISO transmission system and requirements of the MISO Tariff that are the “very circumstances explained in Order No. 688 that gave rise to the rebuttable presumption that smaller QFs lack nondiscriminatory access to markets.”

In rejecting the rehearing motion, the commissioners on Sept. 17 in part ruled that the assertion that Twin Cities’ lack of access to both the organized capacity market and to bilateral capacity sales is due to its own lack of action, even if true, is not germane to NSPM’s request to terminate its purchase obligation. “The record in this proceeding is clear that there are indeed constraints and obstacles in place that prevent Twin Cities QF’s access, and thus nondiscriminatory access, to the organized MISO capacity market and to bilateral capacity sales presently,” said FERC.

It added: “In sum, the arguments advanced by NSPM are contrary to the record evidence and the Commission will not reverse the May 14 Order.”

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.