FERC Rulings Diverge on Commercial Operation Deadlines

Commission Upholds Five Orders

Recurrent Energy

Feb 16, 2023 | Rich Heidorn Jr.

FERC granted an Oklahoma solar project an extension of its commercial operation deadline while rejecting an Illinois wind project’s waiver request.

FERC granted an Oklahoma solar project a 90-day extension of its commercial operation deadline while rejecting an Illinois wind project’s request for a waiver, saying the developer failed to make its case for relief.

The commission on Thursday granted Recurrent Energy’s 120-MW North Fork Solar Project in Kiowa, Okla., a 90-day extension of its required commercial operation date (COD) (ER23-737).

North Fork’s generator interconnection agreement with SPP and Western Farmers Electric Cooperative requires commercial operation by May 1, 2024, which was extended from the original COD of December 1, 2019. The company said it needed a 90-day extension, to July 30, 2024, to align the COD with the mechanical completion date provided by North Fork’s engineering, procurement and construction (EPC) contractor and to allow a 90-day period between mechanical completion and the COD, as required under North Fork’s power purchase agreement.

Neither SPP nor Western Farmers opposed the waiver.

North Fork said it has spent $7.7 million developing the project and expects to spend an additional $11 million by the time construction begins, including payments to the EPC contractor, developer fees and financing costs. It has secured land rights for 1,920 acres for the project, which will interconnect at Western Farmers’ 138-kV Snyder Substation.

North Fork has a 15-year PPA with the Oklahoma Municipal Power Authority (OMPA) for the full output of the project. The PPA requires the project to reach commercial operation by May 31, 2024, so that OMPA can claim capacity credits for the summer of 2024. North Fork would be liable for liquidated damages if it misses the deadline.

“Accordingly, North Fork states that it is commercially incentivized to achieve commercial operation as soon as possible,” FERC said.

North Fork said its EPC contractor has provided an estimated mechanical completion date of mid-March 2024, which would precede the initial synchronization and beginning of test sales.

Waiver Rejected

In a second order, the commission rejected a request by ZEP Grand Prairie Wind, a proposed 150-MW project in Illinois, to extend its COD from November 2025 to February 2027 because of delays caused by the COVID-19 pandemic (ER23-137).

ZEP’s generator interconnection agreement with MISO and the city of Springfield, Ill., would be terminated if the project does not reach commercial operation by November 2025.

Developer UKA North America said it had recalled its land agents responsible for negotiating property rights for the project site and interconnection rights-of-way in response to the Illinois governor’s March 2020 executive order requiring all non-essential employees to remain at home because of the COVID pandemic.

The company also cited supply chain problems that arose during the pandemic, saying key components that previously took nine to 12 months to receive are now taking 18 months or longer.

ZEP Wind said that it has spent more than $4 million on the project and obtained 100% site control and more than 85% of the transmission rights-of-way required. Nevertheless, it said will be unable to reach commercial operation by its 2025 deadline.

The commission said ZEP Wind “has not provided any details regarding whether any components for the project are delayed, the estimated time for their delivery, or whether and how any such delay affects its ability to achieve commercial operation by November 15, 2025.”

The commission said it would reconsider the waiver request if ZEP Wind provides more detail.

FERC on Thursday also upheld five prior rulings that had been subject to rehearing requests:

- - The commission addressed arguments raised on rehearing of its Oct. 20, 2022, order accepting Henderson Municipal Power and Light as a transmission owner in MISO and allowing Henderson to recover its revenue requirement for transmission facilities (ER19-776-002, ER19-809-002). (See FERC Rules Kentucky Muni Can Remain a MISO TO.)
  - The commission addressed requests for rehearing of its Sept. 9, 2022, order accepting two unexecuted generator interconnection agreements, which assigned to SPP interconnection customers the costs of a network upgrade (ER22-2371-001, ER22-2372-001).
  - The commission rejected Tenaska Clear Creek Wind’s request for rehearing of its Sept. 9, 2022, order, which found that the assignment of certain network upgrade costs was just and reasonable (EL21-77-003). The order also denied a motion for stay. (See FERC Rules in Three SPP Disputes.)
  - The commission rejected a request for rehearing and clarification of its Dec. 16, 2022, order setting for hearing and settlement judge procedures issues raised in a complaint relating to the operation of Entergy’s Grand Gulf nuclear facility (EL21-56-001). (See Fifth Circuit Demands an Explanation from FERC on Long-Pending Grand Gulf Complaints.)
  - FERC sustained the result of its Oct. 7, 2022, order denying Southwestern Public Service Company’s complaint alleging that SPP violated its tariff by setting the cleared energy award for SPS’s Hobbs generating facility to zero when SPP settled the day-ahead market for Feb. 17, 2021 (EL22-30-001).