North Carolina commission rejects Ecoplexus arguments over QF obligations

The North Carolina Utilities Commission on Sept. 22 established when five solar project companies established legally enforceable obligations (LEOs) with Virginia Electric and Power d/b/a Dominion North Carolina Power (DNCP) for the sale of their power.

On April 10, Fresh Air Energy XXV LLC, Fresh Air Energy XXXIII LLC, Fresh Air Energy XIX LLC, Fresh Air Energy II LLC, Fresh Air Energy XXXVII LLC and their parent, Ecoplexus Inc., filed a complaint against DNCP. They alleged that their five solar photovoltaic projects are located in DNCP’s service territory and that they are entitled to sell power to DNCP under terms established pursuant to the Public Utility Regulatory Policies Act of 1978 (PURPA).

In addition, complainants alleged that they have obtained certificates of public convenience and necessity (CPCNs) from the commission authorizing construction of each of the solar facilities and that they have committed to sell their electric output to DNCP under negotiated long-term power purchase agreements (PPAs) for qualifying facilities (QFs) having a capacity in excess of 5 MW, thus creating LEOs upon DNCP to purchase the solar facilities’ electric output.

Complainants said that the dates of the LEOs range from June 2014 to October 2014, based mainly on each date that the commission granted a CPCN. Complainants also said that DNCP has failed to provide them with proposed rates or a draft PPA to initiate the PPA negotiation process.

On May 1, DNCP filed a response to the complaint. DNCP discussed the North Carolina commission’s two-prong LEO test requiring that a QF: have a CPCN; and have made a commitment to sell its electric output to a utility pursuant to a PPA. DNCP admitted that the owner of each of the solar facilities has obtained a CPCN from the commission. Further, DNCP agreed that the owner of each of the solar facilities indicated to DNCP in writing by electronic mail to DNCP’s Power Contracts Department dated Feb. 26, 2015, that the solar facility was committing to sell its output to DNCP pursuant to a PPA to be negotiated with DNCP.

However, DNCP contends that three of the solar facilities – Vaughn’s Creek (Fresh Air Energy XXV); Turkey Creek (Fresh Air Energy II); and Pleasant Hill (Fresh Air Energy XXXVII) – had not become qualifying facilities under PURPA prior to obtaining their CPCNs and making the Feb. 26, 2015, commitment to sell their output to DNCP. Therefore, according to DNCP, these three facilities did not establish their LEOs until they became QFs on April 6, 2015, March 23, 2015, and April 6, 2015, respectively.

With regard to the status of the two remaining solar facilities – Grandy (Fresh Air Energy XXXIII) and American Legion (Fresh Air Energy XIX) – DNCP maintains that their LEOs were established on Feb. 26, 2015, as they had met the commission’s two-pronged LEO test and were certified as QFs under PURPA on that date.

Complainants disagreed with DNCP’s position that the LEO for each solar facility was created no earlier than Feb. 26, 2015, the date on which Ecoplexus representative Erik Stuebe sent an e-mail to DNCP’s Power Contracts Department requesting PPA contracts. Complainants maintain that the commission should reject this position because it would thwart the overriding purpose of PURPA to encourage QF development.

Said the Sept. 22 commission decision: “Based on the foregoing and the record in this proceeding, the Commission concludes that neither Complainants’ interconnection applications nor the statements in the CPCN applications and Orders that the applicant ‘plans to sell the electricity to Dominion North Carolina Power’ constituted a commitment by Complainants to sell their electricity to DNCP. In addition, the Commission concludes that Complainants were not required to have obtained QF status in order to satisfy the Commission’s two-prong LEO test. As a result, the LEO for Complainants’ five solar facilities was established on February 26, 2015, when Complainants sent an electronic mail to DNCP stating their commitment to sell the electricity generated by the five solar facilities to the utility.”

These five projects are:

  • Fresh Air Energy XXV, Vaughn’s Creek project, 19.99 MW;
  • Fresh Air Energy XXXIII, Grandy project, 19.99 MW;
  • Fresh Air Energy XIX, American Legion project, 16.5 MW;
  • Fresh Air Energy II, Turkey Creek project, 13.5 MW; and
  • Fresh Air Energy XXXVII, Pleasant Hill project, 12 MW.
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.