FERC confirms renewable generators’ priority rights over transmission lines 

Finding that subsidiaries of Terra-Gen Power LLC have “shown the existence of specific, pre-existing plans, with definite dates and milestones, for phased development” of their new wind and solar power generation projects, FERC on Feb. 17 confirmed (EL10-62) that the companies will have priority to use all the capacity on three transmission lines they plan to construct to connect the projects to the grid.

According to the commission, “significant progress has already been made in completing the generation projects” of the 10 Terra-Gen subsidiaries, which together will have an aggregate total generating capacity of about 1,320 MW. Moreover, they have provided evidence to show that they intend to build additional projects that will use the remaining 687 MW of capacity on the lines, “including specific milestones for constructions, as well as a demonstration of progress in completing these milestones,” FERC said.

At issue are the transmission rights over three 230-kV radial generator tie lines: a 305-MW, 4.4-mile line; an 807-MW, 1.8-mile line; and an 895-MW, 5.6-mile line. In an April 2010 request for declaratory order, the companies told FERC that the capacity on those lines is needed to interconnect the generating projects they are developing in multiple phases near Mojave, Calif., that together will comprise the Alta Wind Energy Center and Alta Solar Energy Center.

Specifically, the Terra-Gen companies recounted that five of their planned projects are expected to come online during the first half of 2011, two more have targeted in-service dates in 2012, and additional projects with planned commercial operation dates ranging from 2014 through 2016 are in the works.

In granting the request, FERC noted that it previously found that transmission owners may have firm priority rights on their transmission lines when they have specific, pre-existing generation expansion plans with milestones for construction and have made material progress toward meeting those milestones. An affiliate of a transmission owner also may obtain firm priority rights on a line if that line ultimately will be used to serve the affiliate’s own load or if the affiliate demonstrates specific expansion plans, with milestones, that will use the line in the future, so long as ownership of the line is to be transferred to that affiliate.

Here, the projects are well under way, and the Terra-Gen companies have signed related power purchase agreements, supply contracts, large generator interconnection agreements, and balance-of-plant construction contracts, FERC recalled. “These factors provide strong evidence of petitioners’ specific plans to construct generation plants that will interconnect to and use 1,320 MW of capacity” on the lines.

The commission further noted that ownership of the three new transmission lines will transfer to the individual project companies as those companies’ generating facilities move into financing and commercial operation stages.

FERC stressed, however, that the Terra-Gen companies will be required to offer service on the lines in question for any capacity they are not using and to expand the transmission facilities if a third party requests capacity when none is available.

Finally, the commission granted the Terra-Gen companies’ request for a waiver of the requirement that they file an open-access transmission tariff, “unless and until they receive a request for transmission service.” Waivers of requirements related to standards of conduct and the establishment of an open-access, same-time information system were also granted because the transmission lines in question “are limited and discrete facilities.”

Terra-Gen Power is a subsidiary of ArcLight Capital Partners LLC and Global Infrastructure Partners.

[additional links available at www.snl.com]