Reversing course, FERC on Thursday ruled that PJM did not have to pay an Illinois wind farm $10 million under a resettlement of incremental capacity transfer rights (ICTRs) to the Commonwealth Edison locational deliverability area (LDA) (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 an 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.
The commission ordered the resettlement in April 2020 in response to a complaint by Radford’s Run Wind Farm, which said PJM unfairly denied ICTRs for funding an upgrade identified in its system impact study (SIS) to mitigate a thermal overload on the 345-kV Loretto-Wilton Center line.
In a subsequent compliance filing, PJM determined that Radford’s Run was entitled to almost $10 million for the 2019/20 delivery year. Crediting the wind farm required offsetting charges to the load-serving entities in the ComEd LDA associated with their corresponding CTR reductions. (See PJM Announces $10M Resettlement in ComEd LDA.)
In Thursday’s order, however, the commission said it now concludes the wind farm wasn’t entitled to ICTRs at the time of the 2016 Base Residual Auction for 2019/20.
Agreeing with challenges by PJM and Exelon’s Commonwealth Edison (NASDAQ:EXC), FERC said its earlier rebilling directive was “incompatible” with the PJM tariff’s definition of ICTRs because the wind farm did not become “obligated to fund” its upgrades until after the 2016 BRA.
The commission said PJM’s tariff is “ambiguous as it does not expressly state when the obligation to fund must occur.”
It concluded that the tariff requires that the resource either execute an interconnection construction service agreement with collateral or reimburse the transmission provider for the costs of the customer-funded upgrades prior to the BRA to qualify for the ICTRs for the associated delivery year.
The 306-MW wind farm in Macon County, Ill., went into service in December 2017. Neither the wind farm’s owner, RWE Renewables Americas, nor its attorney, Bruce Grabow of Locke Lord, responded to requests for comment.
PJM spokesman Jeff Shields said the RTO will comply with the order. “We don’t have any further details at this time,” he said.
