NextEra loses argument at FERC over capacity increase at Massachusetts plant

The members of the Federal Energy Regulatory Commission on June 16 rejected a March 18 complaint from NextEra Energy Power Marketing LLC and Northeast Energy Associates (NEA) against ISO New England (ISO-NE).

NextEra and NEA alleged that ISO-NE acted contrary to its Transmission, Markets and Services Tariff when it disqualified an incremental capacity increase at NextEra’s Bellingham Energy Center from participating in ISO-NE’s Forward Capacity Auction (FCA) for the 2019-2020 capacity commitment period (FCA 10). “As discussed below, the Commission denies NextEra’s amended complaint,” said the June 16 FERC ruling.

Bellingham is a dual-fuel combined cycle plant that is owned by NEA and located in Bellingham, Massachusetts. For FCA 10, NEA sought to increase the summer Qualified Capacity at Bellingham by 25 MW. NextEra states that Bellingham’s existing summer Qualified Capacity rating is 277.6 MW and its existing winter Qualified Capacity rating is 336.5 MW. NEA submitted an interconnection request and a Show of Interest for the Bellingham capacity increase on the March 3, 2015, submission deadline for FCA 10. However, NEA did not submit the required deposit until the following morning. NextEra states that, as a result of the deposit being late, ISO-NE denied NEA’s Show of Interest for FCA 10. NEA subsequently filed a request for a one-time waiver of the timing requirements of ISO-NE’s Tariff, which the commission granted.

The parties in the case agree that NEA’s Bellingham facility did not meet one of the thresholds for a New Generating Capacity Resource and thus, the incremental capacity would be treated under section III.13.1.2.2.5 as a Significant Increase. The dispute centers primarily on the proper treatment of a Significant Increase, in particular, on whether it may be combined with existing capacity and thus, not required to link its summer Qualified Capacity with winter Qualified Capacity via a composite offer, or whether it is considered a New Generating Capacity Resource, and thus, required to submit a composite offer linking incremental summer Qualified Capacity to existing winter Qualified Capacity.

NextEra states that, after the NEA Waiver Order was issued on Sept. 15, 2015, NEA contacted ISO-NE to ensure that the Bellingham capacity increase was treated as a Significant Increase and to decrease the size of the increase from 25 MW to 10 MW. NextEra adds that, in September 2015, ISO-NE issued its Qualification Determination Notice finding that the Bellingham capacity increase qualified as a Significant Increase for 10 MW of summer Qualified Capacity. NextEra further states that, on Oct. 19, 2015, and on a number of subsequent occasions, ISO-NE’s Forward Capacity Tracking System (FCTS) showed the Bellingham capacity increase to be qualified as a 10 MW Significant Increase. However, according to NextEra, in its Jan. 28, 2016, review of resources to be included in FCA 10, it did not see the Significant Increase listed, and the 10 MW Significant Increase was unavailable when NextEra attempted to delist it during ISO-NE’s Feb. 3, 2016 mock auction.

NextEra states that it was subsequently informed by ISO-NE that the Significant Increase was disqualified because NextEra had not submitted a composite offer consisting of the new incremental summer Qualified Capacity and the existing winter Qualified Capacity at Bellingham. NextEra states that ISO-NE stated that a composite offer was required in order for the new incremental summer Qualified Capacity to be eligible to participate in FCA 10. Next Era asserts that, under the Tariff, a composite offer is only required when the new combined summer Qualified Capacity exceeds the winter Qualified Capacity. NextEra states that, since its existing winter Qualified Capacity exceeded its combined existing and new incremental summer Qualified Capacity, a composite offer is not required.   

Said the June 16 FERC ruling: “The parties do not dispute that the Bellingham capacity increase failed to meet one of the required thresholds for qualifying as a New Generating Capacity Resource and that it qualified as a ‘Significant Increase’ under the Tariff. They disagree on whether the Tariff requires that a Significant Increase to a resource’s summer Qualified Capacity must be included in a composite offer with winter Qualified Capacity to establish the resource’s value as FCA Qualified Capacity. The root of that disagreement lies with whether the 10 MW Bellingham Significant Increase should be treated under the Tariff as a New Generating Capacity Resource or as an Existing Generating Capacity Resource. NextEra relies on the fact that the Bellingham Significant Increase failed to meet the threshold for New Generating Capacity to argue that under section III.13.1.2.2.5 a Lead Market Participant could elect to have the summer Qualified Capacity of its Existing Generating Capacity Resource be the sum of the existing and incremental capacity.  

“NextEra argues that, since the Bellingham capacity increase meets the requirements of a Significant Increase, NextEra could ‘elect to have the Existing Generating Capacity Resource’s summer Qualified Capacity be the sum of’ the Existing Generating Resource capacity plus the new incremental capacity. NextEra contends that its new incremental capacity would be included within its Existing Generating Resource and, under the Tariff rules for Existing Generating Capacity Resources; a composite offer would not be required.

“NextEra’s argument ignores the limiting clause of section III.13.1.2.2.5, which states, ‘provided however, that the Lead Market Participant must abide by all other provisions of this Section III.13 applicable to a resource that is a New Generating Capacity Resource pursuant to section III.13.1.1.1.3.’ In effect, ISO-NE’s Tariff provides an ‘adjustment’ to the calculation of an Existing Generating Capacity Resource’s summer Qualified Capacity for certain Significant Increases in capacity that do not meet the threshold for New Generating Capacity so that the incremental capacity can elect, nonetheless, to participate in the FCA according to the rules for New Generating Capacity Resources. Under that ‘adjustment,’ ISO-NE notified NextEra that it qualified as a Significant Increase. However, NextEra argues that the requirements associated with a New Generating Capacity Resource do not apply, but rather that its Significant Increase in capacity should be treated as an Existing Capacity Resource. Thus, NextEra elected to utilize section III.13.1.2.2.5 in order to qualify its incremental capacity as a Significant Increase while disregarding the remaining portion of that provision. We agree with ISO-NE that section III.13.1.2.2.5 of the Tariff is clear that a Significant Increase must abide by all the provisions applicable to a New Generating Capacity Resource that met the applicable thresholds. Thus, we deny NextEra’s complaint.”

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.