The company on March 12 requested that the commission grant a waiver to allow Nelson to secure a partial exception from the requirement to offer the full amount of Nelson’s facility’s capacity into the Base Residual Auction (BRA) of PJM Interconnection’s Reliability Pricing Model (RPM) Auction for the 2017/2018 Delivery Year.
Nelson is currently developing a nearly 600 MW combined-cycle gas turbine electric generating facility within PJM, which is expected to go into operation in 2015. The Nelson Facility offered into and cleared the PJM 2016/2017 RPM BRA. As a result, it is considered an Existing Generation Capacity Resource and is required to offer its capacity into the next BRA to be held in May 2014 for the 2017/2018 Delivery Year unless it requests and is granted an exception under Section 6.6(g) of Attachment DD of the PJM Tariff.
One of the available exceptions applies when the Existing Generation Capacity Resource has a financially and physically firm commitment to an external sale of its capacity.
On March 12, Nelson executed an agreement with WPPI Energy under which WPPI will purchase 15.6 percent of the Nelson Facility’s output for a 20-year term, which commences June 1, 2017, at the beginning of the 2017-2018 Delivery Year. WPPI serves loads that are located in the Midcontinent Independent System Operator region, where it intends to designate this capacity as a firm network resource in support of its MISO resource adequacy requirements. The WPPI agreement results in a financially and physically firm commitment to an external sale from the Nelson Facility, Nelson said.
Said WPPI in a March 13 support brief: “WPPI urges the Commission to promptly grant Nelson the requested waiver to enable PJM to remove 15.6 percent (approximately 90 MW) of the 600 MW capacity of the Nelson facility from the BRA for the 2017/2018 Delivery Year because Nelson has entered a financially and physically firm commitment to sell that portion of its capacity to WPPI for use as a firm network resource to support its resource adequacy obligations in Midcontinent Independent System Operator, Inc. (MISO).”
PJM’s Independent Market Monitor (IMM) said in its own March 26 brief: “The Market Monitor opposes the request for waiver because Nelson did not enter into the agreement for export until two months after the applicable deadline. Nelson has not indicated a valid reason for granting a waiver.”
Said Invenergy Nelson and WPPI in a March 28 joint reply brief: “The Commission should deny the IMM’s request because Nelson has amply satisfied the requirements for waiver given the unusual circumstances.
As described below, grant of the limited, one-time, Waiver Request is needed to preserve a twenty-year contract that will enable a WPPI to meet its long-term load obligations and resource adequacy requirements, and will not appreciably diminish the capacity available to or otherwise adversely impact PJM’s upcoming capacity market auction. The IMM has advanced no valid justification to deny the Waiver Request, even while at the same time choosing to not oppose a waiver request made by Dynegy Marketing and Trade, LLC (“˜Dynegy’) that has been triggered by the very same circumstances that are the predicate for the Nelson Waiver Request.”