By Tom Kleckner
Entergy’s operating companies don’t have to sign new purchase power agreements with most qualifying facilities above 20 MW, FERC ruled last week (QM14-3-000).
Because of their membership in MISO, the commission said, the Entergy companies had met their “statutory standard” under a 2006 order in which the commission revised its regulations implementing the Public Utility Regulatory Policies Act.
In a separate order, the commission granted Arkansas Electric Cooperative Corp. (AECC) similar relief based on the 2006 order, which said that QFs with net capacity above 20 MW were presumed to have “nondiscriminatory access” to wholesale markets in RTOs such as MISO.
The commission denied Entergy’s request for relief regarding one QF, Dow Chemical’s Plaquemine facility south of Baton Rouge, La., which it said faced transmission constraints.
Excluding the Dow facility, FERC said MISO provides all “over-20 QFs” in Entergy’s territories “nondiscriminatory access to independently administered, auction-based day-ahead and real-time wholesale markets for the sale of electric energy and to wholesale markets for long-term sales of capacity and electric energy.”
Entergy’s request was supported by the Louisiana Public Service Commission but protested by several industrial customers with QFs.
The Louisiana PSC said QFs in Entergy’s service territory have nondiscriminatory access to MISO’s markets and noted the company’s request “was made in part to satisfy the Louisiana commission’s requirements — which included removing the PURPA ‘put’ obligation — in approving MISO membership for Entergy Gulf States Louisiana and Entergy Louisiana.”
Justice Department Investigation
Protests by Occidental Chemical and Formosa Plastics cited an open Department of Justice antitrust investigation into Entergy’s transmission practices. Formosa said FERC should deny Entergy’s application pending a resolution of the investigation, noting that the department sought to have Entergy divest its transmission system. Occidental said that MISO had not approved transmission improvements to relieve the Amite South load pocket.
The commission said that because Amite South is import constrained, Occidental’s Taft QF was not prevented from selling energy outside the load pocket, and noted that LMPs at the plant are higher than average LMPs in MISO.
“Moreover, as Entergy points out, any energy which the Taft QF sells to load-serving entities outside the Amite South load pocket, including through the sub-regional power balance constraint to load-serving entities in MISO Midwest would, therefore, most often relieve congestion caused by the constraint, rather than be barred by it, and would instead receive congestion credits,” FERC said.
In contrast, FERC said, Dow’s 1,491-MW Plaquemine QF is located in a generation pocket, which is export constrained and subject to lower LMPs than the rest of MISO.
Entergy told FERC that transmission upgrades are scheduled to go in service around the Dow facility in December 2018. FERC said Entergy will be able to file for termination of its obligation to the Dow QF once the upgrades are completed.
The commission emphasized that granting Entergy’s application “does not relieve Entergy of its obligation to abide by its existing agreements.”
Entergy told FERC it would honor existing contracts “pending satisfaction of applicable contract termination requirements” and said it would not “seek to terminate any existing agreements effective prior to 120 days” after its request was accepted. FERC’s order was effective Oct. 23, 2015, the date of Entergy’s filing.
AECC Request Approved
In a related order, FERC also granted AECC’s request to terminate its PURPA obligations for “over-20” QFs in MISO (QM15-3-000).
AECC made the request in April on behalf of itself and its 17 members, 14 of which are in MISO, but later amended the application so that it applied solely to the cooperative. The commission agreed with AECC that it relies on Entergy Arkansas’ transmission system to serve its members’ load.
