Fortistar North Tonawanda Inc. (FNT), the owner and operator of a 55-MW cogen located in North Tonawanda, New York, on Nov. 2 requested that the New York State Public Service Commission grant a certificate of public convenience and necessity to sell thermal energy to a user located near the facility’s site, Wheatfield Gardening LLC.
FNT requested that the CPCN become effective on and as of the later of the date that the Qualifying Facility (QF) status of its cogen under the Public Utility Regulatory Policies Act of 1978 (PURPA) is terminated or the facility ceases to be a cogeneration facility under the state Public Service Law.
FNT asked for commission by no later than the commission’s Dec. 17 session, because the facility’s production and delivery of steam will be subject to the commission’s jurisdiction as of the date it ceases to be a QF and a cogeneration facility. FNT may relinquish its QF status and cease to be a cogeneration facility on or before January 2016 and will become subject to the commission’s jurisdiction for the first time since it commenced operations in 1989.
The FNT facility is an approximately 55-MW topping-cycle cogeneration facility that is interconnected with the transmission system of Niagara Mohawk Power d/b/a National Grid. It sells energy, capacity and ancillary services exclusively at wholesale. The facility also sells its thermal energy output through a 13,200-foot, 8-inch diameter steam pipe to a local greenhouse facility that produces vegetables. On or before Jan. 1, 2016, FNT intends to reduce the volume of its thermal energy sales, and, therefore, it will lose its QF status and cease to be a cogeneration facility under the Public Service Law.
The Federal Energy Regulatory Commission granted FNT authority to sell its electric output at market-based rates on April 9, 2014. FNT was also certified as an exempt wholesale generator on March 24, 2014.
FNT is a wholly-owned, indirect subsidiary of Fortistar LLC, which engages in the generation or sale of power only from, or has ownership interests only in, electric facilities that are QFs, exempt wholesale generators, or foreign utility companies.
In June 2015, FNT and National Grid entered into an amended and restated power purchase agreement (PPA) which does not require the facility to maintain its QF status. Due to the change in the operation of the facility resulting from the amendment of the PPA with National Grid, FNT may no longer meet FERC’s operating and efficiency standards that are necessary to maintain QF status as a cogeneration facility. FNT may also no longer produce steam whenever it generates electricity, and therefore no longer meet the definition of a cogeneration facility under the Public Service Law.
Said the application: “It is in the public interest to grant FNT a CPCN. The Facility is economically feasible as it has been providing steam reliably through the steam pipe to the greenhouse for over 25 years. FNT has been exempt from steam corporation regulation because it has been a QF under PURPA and a cogeneration facility under the PSL providing steam to its steam host. The Facility’s production of steam will be subject to Commission jurisdiction once the Facility is no longer a QF and a cogeneration facility. Issuance of the requested CPCN is essential to ensure the continuous provision of steam to the greenhouse. Currently, there is no other utility providing steam service in the area. Therefore, absent such authorization, the greenhouse may not be able to continue to receive steam service. The continued provision of steam is critical to the greenhouse’s business and, in turn, the economic well-being of the entire region. Therefore, the Facility’s operation is in the public interest and a CPCN should be issued expeditiously.”