PJM argues against FERC action on waiver for Dan’s Mountain Solar project

PJM Interconnection told the Federal Energy Regulatory Commission on Oct. 6 that a Sept. 22 request for limited waiver from Dan’s Mountain Solar LLC of the PJM Open Access Transmission Tariff to allow the solar company to execute an Interconnection Service Agreement (ISA) with Potomac Edison raises issues.

The Dan’s Mountain Solar Project is a planned 18.36-MW photovoltaic array in Allegany County, Maryland. The project is one of the larger renewable energy sites in Maryland, which will generate approximately 31.3 million kilowatt hours of clean electricity per year and be virtually hidden from view, the company said. The project has been in development for more than two years and Dan’s Mountain has invested hundreds of thousands of dollars.

PJM wrote in its Oct. 6 response: “In summary, PJM files this Answer to clarify that Movant’s Waiver request is based upon a misrepresentation of the facts and, depending upon the timing of the Commission’s determination in this proceeding, reinstatement of Movant’s queue position Z2-038 could potentially have negative impacts on other developers.”

In February 2014, Dan’s Mountain Solar submitted a Generation Interconnection Feasibility Study Agreement to PJM that identified its plan to construct the Frostburg–Ridgeley 138-kV generation project (under Queue No. Z2-038) with ground-mounted photovoltaic solar arrays. Queue No. Z2-038 moved through the PJM study process, and in December 2015, PJM sent the developer a Facilities Study report, an Interconnection Service Agreement and an Interconnection Construction Service Agreement among PJM, Dan’s Mountain Solar and interconnecting transmission owner Potomac Edison.

On Jan. 19, 2016, the developer contacted PJM requesting clarification concerning the need to supply a required security deposit along with the executed ISA because Dan’s Mountain Solar was having difficulty obtaining a final Certificate of Public Convenience and Necessity from the Maryland Public Service Commission. Within the confines of the PJM Tariff, PJM offered, and the developer agreed to use, a deferred security option.

Dan’s Mountain Solar was required to provide the security  within 120 days after it executed the ISA, provided that it paid a deposit of at least $200,000 or 125% of the estimated costs that would be incurred during the 120-day deferral period, whichever is greater.

PJM noted that in its waiver request to FERC, Dan’s Mountain Solar asserts that “despite its good faith efforts to ensure timely receipt of local site permits, an unexpected delay in receipt of a final Certificate of Public Convenience and Necessity from the Maryland Public Service Commission until three months after the scheduled due date prevented execution of an ISA with [Potomac].” Notwithstanding these representations, PJM said that Dan’s Mountain Solar did execute the ISA on Feb. 3, 2016, and did execute the companion ICSA on Dec. 8, 2015. The ISA and ICSA were further executed by Potomac Edison on May 17, 2016, and PJM on May 23, 2016.

PJM said it was preparing to file the fully executed ISA and ICSA with the commission when it was determined that the developer failed to pay the full security required underthe ISA. Accordingly, the ISA automatically terminated because it failed to pay security. Further, the ICSA becomes effective on the later of (i) the date fully executed; or (ii) the date security is provided. Since security was never provided, the ICSA terminated by its own terms as well, PJM added. As the agreements terminated on their own terms prior to filing with the commission, they were not submitted to the commission for acceptance. Because Dan’s Mountain Solar did not pay the required security deposit, Queue No. Z2-038 was withdrawn from the queue on June 7, 2016.

PJM added in the Oct. 6 filing: “Compounding PJM’s concern regarding this request is the fact that Queue No. Z2-038 was withdrawn from the queue on June 7, 2016 – approximately four months ago. PJM is currently on the AC1 queue, which is presently still open. Accordingly, while as of September 21, 2016, PJM and Potomac did not see a material impact to third parties if the Commission was to reinstate Queue No. Z2-038, the impact of reinstatement must be re-examined if and when the Commission reinstates Queue No. Z2-038. As the passage of time progresses, the probability of another project being materially impacted by reinstatement of Queue No. Z2-038 increases with each new Interconnection Request queue entry received between September 21, 2016 and such time as the Commission may reinstate Queue No. Z2-038.

“If any other developer entered a queue request which would be impacted by reinstating Movant’s Queue No. Z2-038 project to the queue, several issues could arise under PJM’s interconnection process. First, restudies of subsequent queues (after Z2) could be required to determine cost allocations. Pursuant to the PJM Tariff, Movant and any subsequent impacted Interconnection Requests would be assigned cost allocation for upgrades for any required Local Network Upgrades based upon the allocation as determined by the respective Feasibility and Impact Studies. Secondly, two or more projects impacting the same facilities may actually cause either of those projects to fail, thereby requiring the subsequent projects to undergo additional studies. Thus, allowing Movant to reinstate Queue No. Z2-038 at any given point after September 21, 2016 could potentially disadvantage a similarly situated interconnection customer on the same circuit.”