FERC approved a settlement over Constellation Power Source Generation’s reactive service payments that was initially opposed by PJM’s Independent Market Monitor (ER16-746, EL16-57).

The Nov. 21 order requires Constellation to file a revised reactive service revenue requirement no later than Jan. 16, 2017, and to make refunds if the resulting requirement for Constellation’s units in the Baltimore Gas and Electric zone is less than $1.24 million per year.

The Monitor initially asked FERC to add a list of conditions to the settlement, including updated power factor tests and eliminating the recovery of heating losses. The Monitor said the commission should end the practice of allowing cost of service rates for reactive capability and said if the practice is not discontinued the costs eligible for recovery should include only fixed costs incurred solely for providing reactive service.

On Oct. 4, the Monitor withdrew its opposition to the settlement, “because the settlement ‘establishes no principles and no precedent with respect to any issue in this proceeding’” and because Constellation must make a new filing.

The settlement resulted from a review ordered by FERC in May, when the commission reduced Constellation’s reactive payments by almost $225,000 to reflect the retirements of three generators. (See “Constellation’s Reactive Payments Cut Due to Retirements,” FERC Rulings in Brief.)

Duke Energy ROE Reduced

FERC on Nov. 21 approved an uncontested settlement reducing Duke Energy’s return on equity for transmission to 10%, down from 10.2% (Duke Energy Carolinas) and 10.8% (Duke Energy Progress) (EL16-29, EL16-30).

The settlement also terminates the amortization of Duke Energy Carolinas’ expenses on the aborted GridSouth RTO effective Dec. 31, 2015, caps common equity ratios and a sets a moratorium on changes in the ROE and equity cap through Dec. 31, 2019.

– Rich Heidorn Jr.