Nebraska district seeks FERC okay to shed PURPA obligations with 20+MW projects

Saying that developers of qualifying facilities (QFs) have readily available ways of selling their output in a viable Southwest Power Pool market, the Nebraska Public Power District (NPPD) on Feb. 13 asked the Federal Energy Regulatory Commission to relieve it of the requirement to enter into new contracts or obligations to purchase energy and/or capacity from QFs having a net capacity greater than 20 MW.

These are QFs located within the Southwest Power Pool (SPP). The district asked to be relieved of this obligation effective as of the date of this application, Feb. 12. It said that QFs within SPP enjoy non-discriminatory access to transmission and interconnection services provided by SPP, which is a commission-approved Regional Transmission Organization (RTO), and that such QFs have access to competitive wholesale markets that provide them with a meaningful opportunity to sell capacity and electric energy. “For this reason, relieving NPPD of its obligation to purchase energy and capacity from QFs is appropriate and consistent with Commission policies relating to the implementation of the PURPA purchase obligation,” said the district.

In recent years the commission has authorized revisions to SPP’s tariff to implement market enhancements that provide opportunities for QFs and, indeed, all generators within SPP to make energy and capacity sales, NPPD argued. These changes, referred to as the “Integrated Marketplace,” were made effective on March 1, 2014.

The Integrated Marketplace includes the following design components:

  • Day-ahead energy and operating reserve market, which includes a day-ahead market obligation and virtual bidding proposal;
  • Day-ahead and intra-day Reliability Unit Commitment (RUC) processes;
  • Real-time balancing market, which will replace the current EIS market;
  • Price-based co-optimized energy and operating reserve procurement;
  • Market-based congestion management process including a market for [transmission congestion rights] and allocation of [auction revenue rights];
  • Consolidation of 16 current Balancing Authority Areas in the SPP footprint into a single Balancing Authority Area operated by SPP;
  • Multi-Day Reliability Assessment performed prior to the day-ahead market to manage the commitment of long-start resources; and
  • Market monitoring and mitigation with an Internal Market Monitor.

Commission regulations provide that electric utilities seeking to terminate their PURPA purchase obligation must identify “all potentially affected” QFs in their application, and that such QFs must be notified of and provided with an opportunity to comment on the application. Under the commission’s regulations, potentially affected QFs include: those qualifying facilities that have existing power purchase contracts with the applicant; and qualifying facilities that sell their output to the applicant or that have pending self-certification with the commission for qualifying facility status; any developer of generating facilities with whom the applicant has agreed to enter into power purchase contracts, as of the date of the application filed pursuant to this section, or are in discussion, as of the date of the application filed pursuant to this section, with regard to power purchase contacts; the developers of facilities that have pending state avoided cost proceedings, as of the date of the application filed pursuant to this section; and any other qualifying facilities that the applicant reasonably believes to be affected by its application.

Attachment A to this application includes a list of the QFs that NPPD has reason to believe may be potentially affected if the commission issues an order terminating NPPD’s purchase obligation. Attachment A includes six QFs with which NPPD has existing power purchase contracts. Also included on Attachment A are an additional seven generating resources with which NPPD has entered into interconnection agreements, but with which NPPD does not have power purchase contracts. NPPD has included these seven resources, two of which NPPD notes are above the QF size threshold, in the event that they may be affected by the application.

Among the six projects with existing power deals with the district are:

  • Elkhorn Ridge Wind LLC, 79.9 MW, contract expires in Feburary 2029;
  • Laredo Ridge Wind LLC, 79.9 MW, contract expires in January 2031; and
  • Crofton Bluff Wind LLC, 40.5 MW, contract expires in October 2032.

The seven other resources are:

  • Cottonwood Wind Project LLC (backed by NextEra), 76.4 MW, due for operation by end of this year. NPPD noted that on Dec. 11, 2015, Cottonwood Wind Project requested suspension of its obligations under its Generator Interconnection Agreement (GIA). On Jan. 12, 2016, SPP notified Cottonwood Wind Project that it does not have the option to suspend the GIA, that its request constituted a default of the GIA, and that it would have 30 days to cure this default;
  • Rattlesnake Wind Project LLC (Enel), 200 MW based on SPP website listing/319 MW based on interconnection agreement. NPPD said a non-conforming Generator Interconnection Agreement among NPPD, SPP, and Rattlesnake Wind was approved on Dec. 17, 2014. The SPP website lists the agreement status as suspended;
  • Upstream Wind Energy LLC (Invenergy), 204 MW;
  • Prairie Breeze Wind Energy III LLC (Invenergy), 35.8 MW, under construction;
  • TPW Petersburg LLC (Gestamp), 40.5 MW, output sold to Omaha Public Power District;
  • Prairie Breeze Wind Energy II LLC (Invenergy), 72.5 MW, output sold to Lincoln Electric System; and
  • Aksamit Resource Management LLC, 73.4 MW. NPPD noted that Aksamit has filed QF notices for three projects, each of about this size, called Milligan I, Milligan II and Milligan III.

NPPD observed that the SPP interconnection queue presently includes a number of other resources that are in various stages of study under applicable SPP procedures for potential interconnection to the NPPD system. At this time, no interconnection agreements with NPPD for these resources have been executed or circulated (by SPP) for review and execution, and NPPD does not even know the names of the owners associated with these resources, as this information is not public knowledge and NPPD has not otherwise been made aware of this information. It appears that only three of these potential resources are within the 80 MW size limitation provided for under PURPA.

NPPD said it does not, by this application, seek to alter the existing contractual arrangements with QFs that are already interconnected to its transmission system. NPPD is unaware that any new or revised agreements, including interconnection agreements, are required with respect to these QFs as a result of NPPD’s purchase obligations under PURPA being prospectively terminated. Interconnections to the NPPD transmission system are today and will continue to be governed by the terms of SPP’s tariff, including its generator interconnection procedures.

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.