FERC Order No. 697-C, issued on June 18, 2009, made two major changes to the FERC market based rate compliance requirements. First, it clarified the requirements associated with reporting of sites for generation development. Second, FERC modified slightly the requirements associated with making market sales at the border of a mitigated area.
Land Reporting
FERC now requires annual reports of certain land holdings for which site control has not been demonstrated, and quarterly reports of other land acquisitions where site control has been demonstrated. FERC stated that it will use this reported information to identify sellers that may be erecting barriers to entry.
There is an initial report due on January 1, 2010. This report is to detail land that was acquired, leased or optioned, but for which site control as defined in section 1 of the LGIP is lacking, and for which has been held for three years or more prior to the effective date of this order. Land holdings that have previously been reported to the Commission do not need to be reported again in this initial report.
In addition, annually by January 1st, FERC requires that sellers report any land that a seller has “acquired, taken a leasehold interest in, obtained an option to purchase or lease, or entered into an exclusivity or other arrangement to acquire for the purpose of developing a generation site and for which site control has not yet been demonstrated … during the prior three years.” Each such acquisition is designated as a triggering event, and each such triggering event must be listed in a single report submitted by January 1 of the year following the calendar year in which the triggering event occurred.
The quarterly reporting requirement is specified in a revised §35.42. This regulation requires a quarterly report detailing the “acquisition of a site or sites for new generation capacity development for which site control has been demonstrated in the interconnection process and for which the potential number of megawatts that are reasonably commercially feasible on the site or sites for new generation capacity development is equal to 100 megawatts or more.”
The quarterly report is due within 30 days after the end of each quarter, e.g., by April 30 for the first quarter. Changes in status reports detailing events other than the acquisition of control of sites for new generation capacity development are still required to be made no later than 30 days after the change in status occurs.
FERC relies on the definition of “site control” that is provided in section 1 of the Standard Large Generator Interconnection Procedures (LGIP).
For the quarterly and annual reports, the seller must include: (a) the number of sites acquired; (b) the relevant geographic market in which the sites are located; and (c) the maximum potential number of megawatts that are reasonably commercially feasible on the sites reported, which must be justified. The maximum potential number of megawatts for the sites may be reported on an aggregate basis for each relevant geographic market(s) in which the site(s) are located, i.e., without providing the specific location of particular sites.
The estimate of potential megawatts must be based on the maximum potential number of megawatts that could be produced on the site with the technology for which the site was acquired. The Commission stated that “[s]ellers must be forthright in estimating and reporting the maximum potential number of megawatts that are reasonably commercially feasible on the site or sites for new generation capacity development.”
Border Sales
In Order No. 697-B, FERC revised the border sales restriction to state that “if the Seller wants to sell at the metered boundary of a mitigated balancing authority area at market-based rates, then neither it nor its affiliates can sell into that mitigated balancing authority area from the outside.” FERC indicated that this requirement would prevent a mitigated seller making market-based rate sales at the metered boundary from selling power into the mitigated market through its affiliates.
FERC also explained that sellers may choose to make no market-based rate sales at the metered boundary, or to limit such sales to end users of the power, thereby eliminating the danger they will violate their tariff by re-selling power back into a balancing authority in which they are mitigated.
FERC declined several requests to modify this approach, but did eliminate the “want to sell” requirement in favor of an actually sells standard. Thus, the requirement was modified as follows: “if the Seller wants to sellsells at the metered boundary of a mitigated balancing authority area at market-based rates, then neither it nor its affiliates can sell into that mitigated balancing authority area from the outside.”
December 17, 2009 at 6:58 am |
[...] FERC Decisions Review and Analysis « Order No. 697-C Summary [...]