FERC on Monday granted in part, and dismissed in part, Ponderosa Power’s complaint that NorthWestern Corp.’s proposal to assign roughly $30 million in network upgrade costs to the wind farm developer violates NorthWestern’s tariff and the commission’s “but for” cost allocation policy (EL23-48).
The agency agreed with Ponderosa that NorthWestern’s assignment of the disputed upgrade costs in an optional study that applied a rounding policy is contrary to FERC’s “but for” policy and violated the utility’s tariff. FERC dismissed the remainder of Ponderosa’s complaint as moot because it found for Ponderosa on the issue. It also declined the developer’s request to investigate NorthWestern’s interconnection queue practices, saying the record doesn’t warrant such a review.
NorthWestern’s modeling software represents thermal violations in decimal numbers with values to the hundredth decimal point. As a result, loading values between 99.5% and 99.99% are rounded up to 100%, FERC said, which NorthWestern deems to be a thermal violation requiring network upgrades.
Ponderosa is developing a 70-MW wind-powered generation facility that would be interconnected to NorthWestern’s transmission system in Montana. It filed a Section 206 complaint under the Federal Power Act in March after studies determined Ponderosa would have to pay the upgrade costs.
The commission found that the optional study results did not demonstrate that the disputed upgrades are required for Ponderosa’s project. It said the project’s loading value of 99.65% on one line segment did not trigger a thermal overload under the “but for” policy.
FERC said NorthWestern treats the rounding policy “as a practice that is part of its study process” but said it should be more “correctly viewed” as an after-the-fact change that materially modifies and “effectively departs from” the underlying study results.
“The rounding policy’s clear effect here is to deem the disputed upgrades to be ‘required’ for Ponderosa’s interconnection, notwithstanding that the optional study results otherwise establish that they are not,” the commissioners wrote.
FERC directed NorthWestern to issue Ponderosa within 30 days a revised optional study that removes the disputed upgrades and associated requirements and provides an updated estimate of its network upgrade costs, as the developer requested.
