By Amanda Durish Cook
FERC last week approved 11 Entergy local balancing authority (LBA) agreements stemming from the utility’s 2013 integration into MISO.
Entergy Services and Entergy Arkansas sought the agreements with entities embedded within the LBA areas to ensure accurate coordination and communication of operational and metering information. The agreements identify load and/or generation of counterparties located within each area as well as specifying operational responsibilities and meter specification and data sharing requirements.
The April 26 order (ER14-693, et al.) found that Entergy “demonstrated that the LBA agreements will assist in ensuring reliable operations” of the utility’s electric system.
The commission required Entergy to submit a compliance filing showing that cost allocations for residual loads — the amount of over- or under-claimed energy in an LBA area — will rely on cost-causation principles where possible, replacing the company’s proposed pro rata cost allocation.
Entergy’s original 2013 LBA agreements included a provision that counterparties report their metering data to help the utility correct errors responsible for producing residual loads within the LBA areas.
A revised batch of agreements the next year proposed to instead allocate residual load costs and credits based on a pro rata methodology in order to “simplify the burden associated with meter corrections.” Entergy contended that some embedded entities were too small and their contribution too insignificant to directly assign costs, leaving costs to be allocated according to overall energy injections and withdrawals within an LBA.
Entergy last year offered an additional update to that provision, proposing to work with counterparties to maintain adequate metering equipment to directly assign residual load cost responsibility to a specific company. That process would incentivize “embedded entities to maintain adequate metering and robust processes for reporting data,” the utility said.
Last week’s decision said Entergy’s pro rata cost allocation provision suffered from the same flaws as a similar MISO plan rejected in 2006, which FERC said “failed to allocate unaccounted-for energy to the load that caused it.” However, FERC said Entergy’s efforts to directly assign residual load costs when possible was a sufficient improvement to align with cost-causation principles.
FERC also sided with Entergy in ruling that the utility should not bear the entire cost of residual loads within the LBA areas “because such costs are caused by the accumulated actions of all embedded entities within the LBA areas.”
Counterparties Dow Chemical, Union Carbide, Occidental Chemical, Calpine, Tenaska and Sabine Cogen had questioned the residual load cost allocation proposal and objected to the creation of the LBAs, contending that the agreements do not accomplish anything not already covered by the MISO Tariff and required by the RTO.
FERC said the noncompulsory application of LBAs does not make them any less useful.
“We disagree that, because no commission or MISO rule or policy mandates agreements such as the LBA agreements, they are unnecessary and unjust and unreasonable,” FERC wrote.
The commission also rejected arguments that the agreements too closely resembled generation interconnection agreements and said it was “unpersuaded by arguments that Entergy does not need the LBA agreements in order to carry out its responsibilities as an LBA area administrator.”
