By Rich Heidorn Jr.
PJM must recalculate an Illinois wind farm’s incremental capacity transfer rights (ICTRs) based on the information available to the RTO when it completed the interconnection customer’s system impact study (SIS) in 2015, FERC ruled Thursday (EL18-183).
ICTRs — available to interconnection customers that are required to fund a transmission facility — are awarded based on how much the improvement increases the transmission import capability into a locational deliverability area (LDA). ICTR holders receive revenues if the LDA in question is constrained in subsequent capacity auctions. The rights are good for up to 30 years.
In 2018, the commission granted a complaint by Radford’s Run Wind Farm, which said PJM unfairly denied ICTRs for funding an upgrade identified in its SIS to mitigate a thermal overload on the 345-kV Loretto-Wilton Center line. Radford’s upgrade increased the rating of the line by 47 MVA.
The commission’s 2018 ruling ordered a paper hearing to determine whether the upgrade increased the capacity emergency transfer limit (CETL) of the ComEd LDA, entitling it to ICTRs.
PJM contends that although Radford’s SIS was completed in December 2015, the CETL calculation should be forward-looking, and thus based on the planning model developed in in January 2016, which set the CETL values for the May 2016 Base Residual Auction. PJM said the 2016 analysis showed that the Radford upgrade did not increase the CETL for the ComEd LDA because a voltage collapse concern on the 765-kV Dumont-Wilton line was more constraining.
Radford owner E.ON Climate & Renewables N.A. — which opened the 306-MW wind farm in Macon County, Ill., in 2018 — said the analysis should have used the base case for the 2015 BRA, which it contends would have entitled it to 279 MW of ICTRs.
FERC sided with Radford, saying PJM’s Tariff did not allow the RTO to delay Radford’s SIS or its ICTR calculations.
“While we appreciate PJM’s desire to use the most up-to-date data for all its analyses, we find PJM’s suggested use of later data inconsistent with the certainty and predictability required by the Tariff provisions addressing the timing of studies,” FERC said. “For these reasons, we direct PJM to award any ICTRs that would have been assigned to Radford as of December 2015, as PJM would have done had PJM followed its Tariff.”
It required PJM to make a compliance filing within 60 days. If PJM determines Radford is entitled to ICTRs, it must determine whether the company would have received payments relating to the BRAs held in 2016, 2017 and 2018.
“We see no reason not to require PJM to apply its Tariff correctly and to rebill parties for their correct quantity of ICTRs. Accordingly, we will exercise our discretion and require PJM to resettle payments for ICTRs resulting from the 2016 Base Residual Auction with a 2019/20 delivery year and to rebill affected entities for that period.”
Rule Change
In response to FERC’s 2018 ruling, stakeholders last year approved revisions to the timing and study parameters for determining ICTRs. (See “Revisions on Incremental Capacity Transfer Rights Endorsed,” PJM MRC/MC Briefs: Jan. 24, 2019.)
The change, accepted by FERC last April, allows new service customers to request an ICTR determination on customer-funded upgrades after executing a facility study agreement (FSA) — a later phase in the interconnection process than the SIS — and before the issuance of an interconnection service agreement or construction service agreement. It also limits the requests to no more than three LDAs (ER19-982).
PJM said the change was needed because the procedures detailed in the Tariff would result in delays in processing interconnection requests. PJM said it takes from an additional day to more than one work week to conduct ICTR determinations for each customer-funded upgrade identified across all 27 LDAs in the RTO.
It noted that of the 2,073 customers receiving SISes over the prior decade, only 729 customers proceeded to execute an FSA. PJM also said that when projects drop out of the queue, it must repeat SISes for projects lower in the queue. Delaying ICTR determinations until after execution of an FSA also provides more certainty on costs, PJM said.
EDF Renewables and Renewable Energy Systems Americas filed a joint protest contending that interconnection customers need all possible information at the SIS stage in order to make an informed decision about whether to remain in the queue. They noted that ICTRs can be worth millions of dollars over a 30-year period.
The commission rejected the protest, concluding that the RTO’s changes “appropriately balance the needs of new service customers seeking ICTRs … with promoting the efficient processing of PJM’s interconnection queue.”
