AES Huntington Beach LLC (AESHB) filed Nov. 1 with the Federal Energy Regulatory Commission the 2017 version of its Reliability Must-Run (RMR) agreement with the California Independent System Operator covering Huntington Beach Units 3 and 4 (HB 3 and HB 4), which are synchronous condensers that are providing needed voltage support.
Because CAISO requested that AESHB extend the RMR to include HB 3 for 2017, the Original RMR Agreement has been amended into a new RMR Agreement (“Amended RMR Agreement”) to reflect the extension applicable to AESHB rate schedules for both HB 3 and HB 4. AESHB requested that the commission permit the Amended RMR Agreement for the 2017 Contract Year to go into effect as of Jan. 1, 2017, as requested by CAISO.
AESHB currently owns and operates part of and leases and operates part of the Huntington Beach Generating Station. AESHB is an indirect, wholly-owned subsidiary of AES Corp. (NYSE: AES).
The Huntington Beach Generating Station is a natural gas-fired facility, which also includes the two synchronous condensers that are the subject of this filing, located in the city of Huntington Beach, California, within the balancing authority areas operated by CAISO.
The Original RMR Agreement was accepted by the commission in a 2013 docket, and amendments to the RMR Agreement were accepted by the commission in later annual dockets. Like the Original RMR Agreement, under the Amended RMR Agreement, AESHB collects a cost-of-service rate in exchange for operating two synchronous condensers necessary to provide voltage support in the Los Angeles Basin and San Diego/Imperial Valley local areas that are critically needed as the result of the unexpected long-term outage of San Onofre Nuclear Generating Station Units 2 and 3.
Section 2.1(c) of the Original RMR Agreement further provides that CAISO may extend the term of the RMR Agreement for an additional calendar year for HB 3 annually through 2016 and for HB 4 annually through 2017. Under Section 2.1(b) of the Amended RMR Agreement, the term is fixed for calendar year 2017 for both HB 3 and HB 4, and cannot be further extended without mutual agreement.
The commission previously accepted extensions of the term of the Original RMR Agreement for the 2014 Contract Year, for the 2015 Contract Year, and for the 2016 Contract Year. By letter dated Oct. 11, 2016, CAISO gave AESHB notice to extend the term of the RMR Agreement for an additional calendar year, through Dec. 31, 2017, with respect to both HB 3 and HB 4. Since the Original RMR did not provide for another annual extension for HB 3, the parties agreed to enter into an Amended RMR Agreement to provide for the continued operation of both HB 3 and HB 4.