Dominion responds to solar developer Ecoplexus complaint over QF issues

Virginia Electric and Power d/b/a Dominion North Carolina Power (DNCP) on Feb. 26 filed with the North Carolina Utilities Commission a response to a Feb. 4 arbitration demand from solar developers Fresh Air Energy XIX LLC, Fresh Air Energy XXV LLC, Fresh Air Energy XXXIII LLC, Fresh Air Energy XXXV LLC, Fresh Air Energy XXXVII LLC and Ecoplexus Inc.

The utility noted: “Each of the LLCs is developing a solar photovoltaic generating facility to be located within the Company’s North Carolina service territory (collectively, the ‘Facilities’). The Facilities range in nameplate capacity from 12.00 MW to 19.99 MW. Each of the LLCs has self-certified its respective facility with the Federal Energy Regulatory Commission (‘FERC’) as a qualifying facility (‘QF’) pursuant to FERC’s regulations implementing the Public Utility Regulatory Policies Act (‘PURPA’).

“Each of the LLCs wishes to enter into a separate power purchase agreement (‘PPA’) with the Company for all of the energy and capacity of its respective facility at the Company’s avoided costs pursuant to PURPA. As noted in the Petition, negotiations between the Petitioners and the Company for the PPA began on or around February 26, 2015. The Company has and will continue to engage in free, open and good faith negotiations with Petitioners for a PPA that is consistent with the requirements of PURPA and this Commission’s orders and policies implementing PURPA.

“The Company has offered Petitioners a PPA that would apply to each of the Facilities, with the only difference from one facility’s PPA to another being the name of the relevant LLC and specific facility information including location and capacity. The issues in controversy identified in the Petition concern certain of the terms and conditions contained in that PPA. Specifically, the issues are: (1) whether the Company can include a ‘Regulatory Disallowance Provision’ in the PPA and, if so, whether that provision must be the same regulatory disallowance provision that was included in PPAs previously negotiated between the Company and Ecoplexus that involved separate Ecoplexus affiliates not party to this proceeding; (2) whether the Company must provide a 15-year term for the PPA; and (3) whether the Company must offer the LLCs involved in this proceeding a levelized rate provision that was previously negotiated for the abovementioned PPAs involving separate Ecoplexus affiliates.

“[I]t is the Company’s position that: (1) DNCP is entitled and has been expressly authorized by the Commission to include a Regulatory Disallowance Provision in the PPA, and that the Regulatory Disallowance Provision proposed by the Company equitably allocates the risks and burdens between the Company and its shareholders on the one hand and the LLCs on the other hand; (2) nothing in PURPA or this Commission’s decisions requires that the Company offer a 15-year PPA term to the LLCs; and (3) nothing in PURPA or this Commission’s decisions require the Company to offer the LLCs a levelized rate provision.”

The projects at issue here 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 XXXV, Turkey Creek project, 13.5 MW; and
  • Fresh Air Energy XXXVII, Pleasant Hill project, 12 MW.

Said the Feb. 4 complaint: “Ecoplexus and its affiliates have previously successfully negotiated and entered into three PPAs with DNCP. Those PPAs were the subject of an arbitration proceeding before the Commission in N.C.U.C. Docket No. E-22, Sub 510, which was initiated by petition on July 3, 2014 and which concluded with the execution of the PPAs on or around February 18, 2015 (the ‘2015 PPA’). Thus, Petitioners initiated the PPA negotiation process for the five QFs that are the subject of this Petition only several days after the execution of the 2015 PPA, under the assumption that the PPA tendered by DNCP for the Facilities would involve the same or substantially similar terms and conditions as the previously negotiated 2015 PPA.”

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.