North Carolina commission rules for Dominion in dispute with solar developer Cypress

The North Carolina Utilities Commission on Sept. 22 ruled for the utility in a dispute between solar project developer Battleboro Farm LLC and Virginia Electric and Power d/b/a Dominion North Carolina Power (DNCP) over when a legally enforceable obligation (LEO) was established for a 5-MW solar project.

Skirmishes over when LEOs are established, with can affect the compensation under power contracts, happen fairly often at the commission.

On May 20, Battleboro Farm and its parent Cypress Creek Renewables LLC filed this complaint, alleging that Battleboro is developing a 5-MW solar photovoltaic facility to be located in DNCP’s service territory and that Battleboro is entitled to sell power to DNCP under terms established under the Public Utility Regulatory Policies Act of 1978 (PURPA). In addition, complainants allege that Battleboro’s facility is a qualifying facility (QF) under PURPA, that it has obtained a certificate of public convenience and necessity (CPCN) from the commission authorizing construction of its facility, and that it has committed to sell its electric output to DNCP.

Complainants also alleged that Battleboro has the right under PURPA to enter into a long-term power purchase agreement (PPA) for the sale of the facility’s capacity and energy to DNCP at commission-estsblished avoided cost rates. Moreover, complainants maintained that Battleboro has taken the steps required to create a LEO to obligate DNCP to purchase the facility’s output.

Complainants contend that the date of the LEO is April 22, 2014, based primarily on the commission’s order issued on that date granting Battleboro a CPCN and stating that Battleboro plans to sell its electricity to DNCP. Complainants further said that there is a dispute between them and DNCP as to the date on which the LEO for Battleboro was established and that DNCP has failed to provide complainants with proposed avoided cost rates that are consistent with the rates approved by the commission. 

DNCP disagreed with complainants’ position that the second prong of the commission’s LEO test, requiring a commitment to sell the output of the facility to the utility, is met by submitting a request for interconnection, by statements in the FERC Form 556, by filing a CPCN application and providing DNCP with a copy, or by the commission’s statement in its order issuing the CPCN that Battleboro “plans to sell the electricity to Dominion North Carolina Power.” DNCP contends that these events, individually or in the aggregate, did not constitute a commitment by Battleboro to sell its output to DNCP.

With regard to its position that March 4, 2015, is the date on which Battleboro made its commitment, DNCP stated that a Battleboro representative sent an electronic mail on that date to Donna Lynch in DNCP’s interconnection department asking about the existence of a PPA for the facility. By electronic mail dated March 5, 2015, Lynch informed Battleboro that her department worked only with interconnection agreements and that for a PPA Battleboro would need to contact DNCP’s Power Contracts group.

Said the commission in its Sept. 22 ruling: “[T]he Commission concludes that Battleboro’s interconnection application, statements in the CPCN application and Orders that Battleboro ‘plans to sell the electricity to Dominion North Carolina Power,’ Battleboro’s FERC Form 556, and DNCP’s PURPA Section 210(m) filing, individually or collectively, did not constitute a commitment by Battleboro to sell the electric output of its facility to DNCP. In addition, the Commission concludes that Battleboro first met the ‘commitment to sell’ prong of the LEO test on March 4, 2015. As a result, the Commission concludes that March 4, 2015, was the first date on which Battleboro (1) had obtained a CPCN for the construction of its facility, and (2) had made a commitment to sell its output to DNCP.”

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.