Five affiliates of solar project developer Ecoplexus on April 4 filed with the North Carolina Utilities Commission their initial brief in a latest Ecoplexus dispute with Virginia Electric and Power d/b/a Dominion North Carolina Power (DNCP) over the negotiation of power purchase agreements for a batch of new solar projects.
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 parent Ecoplexus filed the brief. Each of the LLCs is developing a solar photovoltaic generating facility in the DNCP service territory:
- Fresh Air Energy XXV, Vaughn’s Creek project, 19.99 MW;
- Fresh Air Energy XXXIII, Grandy, 19.99 MW;
- Fresh Air Energy XIX, American Legion, 16.50 MW;
- Fresh Air Energy XXXV, Turkey Creek, 13.50 MW; and
- Fresh Air Energy XXXVII, Pleasant Hill, 12.0 MW.
Each of them is a qualifying facility (QF) under the Public Utility Regulatory Policies Act of 1978 (PURPA). DNCP is an electric utility subject to the mandatory purchase obligation of PURPA. Because each of the facilities has a nameplate capacity in excess of 5 MW, a power purchase agreement (PPA) and rates for the purchase of the electrical output must be negotiated for each facility. Petitioners contacted DNCP on or around Feb. 26, 2015 to initiate the PPA negotiation process for each of the facilities.
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 North Carolina commission in a case that concluded with the execution of the PPAs on or around Feb. 18, 2015. Thus, petitioners initiated the PPA negotiation process for the five QFs that are the subject of this current petition only several days after the execution of the 2015 PPAs, 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 PPAs.
“Instead of tendering a PPA that was identical to or substantially similar to the 2015 PPA, DNCP tendered a new PPA (the ‘New PPA’), with new terms and conditions, effectively restarting the negotiation process,” said the April 4 brief. “In addition, by April 2015, it became apparent that a dispute existed between the parties as to the date of the legally enforceable obligation (‘LEO’) for each of the Facilities. As a result, the Petitioners requested that the Commission issue a declaratory ruling on this issue, which the Commission did by order dated September 22, 2105. Thus, the negotiation process for the New PPAs has, effectively, started from scratch and has been lengthy – well over one year as of the date of this brief.
“Ecoplexus and the LLCs do not take issue with the rates offered. Additionally, Ecoplexus, the LLCs and DNCP have made some progress in negotiating certain provisions of the New PPA, which are reflected in the version of the PPA attached as Confidential Exhibit A to the DNCP Response. Therefore, this proceeding is limited to three provisions of the New PPA that Ecoplexus, the LLCs and DNCP have been unable to resolve.”