FERC on Friday accepted ISO-NE’s request to terminate 11 MW of the capacity supply obligations (CSOs) for a Maine wind farm that delayed its commercial operation and reduced its planned output.
However, FERC said the RTO was wrong in executing the termination before commission approval, delaying the effective date to March 24 (ER18-704).
The RTO filed its termination request on Jan. 23, asserting that developer Blue Sky West had delayed its original 2015 commercial operation date multiple times before achieving partial operation in March 2017.
In Forward Capacity Auction 6, the Bingham wind project in Somerset and Piscataquis counties won CSOs of 42.3 MW for summer and 87.3 for winter, beginning with the 2015/16 capacity commitment periods (CCP).
The company agreed to voluntarily relinquish about 20 MW of summer and 22 MW of winter CSOs based on its decision to reduce the number of turbines in the project and change the turbines to a design with a lower capacity. But the company disputed ISO-NE’s demand to reduce the summer CSO by 10.3 MW and winter by 0.79 MW following the RTO’s audits of the farm’s actual output.
The RTO filed to terminate immediately that portion of the resource’s CSOs in the 2017/18 through 2020/21 capacity years, and to adjust the facility’s qualified capacity for future capacity auctions.
Blue Sky West filed an emergency motion asking the commission to order reinstatement of the disputed CSOs, arguing the grid operator must receive commission approval before the termination could become effective. On Feb. 2, 2018, the commission granted the motion, ruling that the termination could not be made effective prior to March 24, the end of the 60-day notice period.
The RTO’s Tariff allows termination of CSOs if a new facility covers its capacity shortfalls through bilateral trades or the reconfiguration auctions for two capacity commitment periods. The developer claimed the audits should not be justification for reducing the CSOs because they are not listed as “critical path” schedule requirements in the RTO’s Tariff.
The commission disagreed, saying, “Neither achieving ‘commercial operation’ nor fulfilling ‘critical path schedule milestones’ precludes ISO-NE from terminating a resource’s CSO under” the Tariff.
The RTO said that if it did not perform terminations in advance of the FCA, a resource that is not fulfilling its CSO could obtain one for another year and potentially suppress auction clearing prices and provide the region with phantom megawatts that cannot produce energy.
FERC agreed with the grid operator’s right to manage its capacity resources but departed with it regarding its termination rights. “While the [Tariff] language is ambiguous, we find that under a sensible reading of the provision and as a practical matter, [a Federal Power Act] Section 205 filing is necessary to obtain a ‘commission ruling’ on any aspect of an involuntary termination,” the commission said.
Requiring such approval of involuntary terminations “should not impede the grid operator’s administration of the Forward Capacity Auction,” FERC said.
“Given that the [FCA] takes place in February of each year, the [RTO] usually submits termination filing in October of the prior year, giving the commission enough time to rule on the termination filing before the Forward Capacity Auction is conducted,” the commission said.