By Michael Brooks

FERC last week denied Occidental Chemical on three fronts in the company’s battle against MISO and Entergy’s treatment of qualifying facilities.

The commission dismissed a 2013 complaint by the Dallas-based chemical manufacturer that claimed MISO’s treatment of QFs violated the Public Utility Regulatory Policies Act (EL13-41). Occidental argued that MISO’s plan to integrate QFs in Entergy’s territory would strip them of their rights under PURPA, as the law assumes that they do not have access to wholesale markets.

This plan was detailed in a document titled “Qualifying Facilities Generator Readiness for MISO Reliability Coordination and Market Integration,” which was circulated at informational meetings with QFs. It included two options for QF participation, one of which was labeled the “hybrid option.” Under this option, a QF is allowed to submit offers or self-schedule in both the day-ahead and real-time markets up to its maximum capacity. MISO said that by using financial schedules, which Entergy would be required to agree to, QFs would be able to maintain their right to sell at the avoided cost rate, pursuant to PURPA.

Occidental argued that the hybrid option would prevent QFs from exercising their right to sell as-available energy under PURPA. The company also argued that MISO should have been required to seek FERC approval for its integration plan.

The commission was unpersuaded by Occidental’s arguments.

“In this instance, registration under the hybrid option allows QFs to participate in the MISO market, while continuing to exercise their rights pursuant to PURPA,” FERC said. “We find that the use of financial schedules in conjunction with the hybrid option preserves a QF’s right to provide as-available energy.”

Complaint Against LSPC

While its complaint against MISO was pending before the commission, Occidental filed a complaint against the Louisiana Public Service Commission in February 2014. Occidental protested that the PSC had essentially adopted MISO’s QF integration plan.

FERC declined to take action on the PSC complaint while Occidental’s MISO complaint was still pending. In response, the company sued Entergy and the PSC in federal district court, which stayed the proceeding until FERC reached a decision in the MISO complaint. Occidental appealed, and in January the 5th U.S. Circuit Court of Appeals overturned that decision, noting that it could take years before FERC reached a decision. It ordered the lower court to give FERC 180 days to resolve the MISO complaint; if FERC had not reached a decision, the court could proceed with the suit (15-301).

With the MISO complaint settled, FERC subsequently issued a notice of intent not to act on the PSC complaint (EL14-28).

Rehearing Denied

Finally, FERC denied a rehearing request from Occidental regarding its order waiving the requirement for Entergy to sign power purchase agreements with QFs that have capacities over 20 MW (QM14-3). (See FERC: Entergy not Required to Buy from Large QFs.)

Occidental argued that the commission ignored evidence showing that MISO’s integration plan would deny its Taft QF, located at its Hahnville, La., chemical plant, nondiscriminatory access to the RTO’s markets.

But FERC noted its decision upholding MISO’s plan. “Given this finding, Occidental’s argument in the instant case that it lacks nondiscriminatory access to the MISO markets based on the MISO QF integration plan is moot,” it said.