- PacifiCorp’s proposal for an expedited process to allow power plant owners to replace retiring generating units may give the utility company an unfair advantage and make it more expensive for other generators to connect to the grid, Utah Associated Municipal Power Systems and NewSun Energy said Thursday in separate protests at the Federal Energy Regulatory Commission.
- A planned independent coordinator to oversee the process creates a “veneer of non-discrimination,” partly because it wouldn’t blunt the “overwhelming” competitive advantages the proposal creates for PacifiCorp in replacing its power plant fleet, NewSun said.
- UAMPS urged FERC to schedule a hearing or technical conference for more information while NewSun said the proposal should be rejected outright.
The dispute at FERC coincides with the retirement in the U.S. of aging fossil-fueled power plants that have valuable interconnection rights.
FERC last month waived Vistra Corp. from Midcontinent Independent System Operator interconnection rules so the company can add battery storage at two Illinois coal-fired power plants being retired.
“I am concerned that, in repeatedly approving generator replacement procedures across the country, the commission is sleepwalking toward a fundamental reshaping of interconnection procedures without adequate consideration of the pros and cons of this policy approach, or deep inquiry into its legal validity,” FERC Commissioner Allison Clements said in a concurrence to the decision.
In November, PacifiCorp proposed a process allowing power plant owners to replace retiring generating units without going through a clustered interconnection process required of greenfield power projects. In a change from existing practice, other generators wouldn’t have access to the retiring plant’s interconnection rights under the proposal.
Separately, PacifiCorp, based in Portland, Oregon, proposed hiring Excel Engineering of MN as the independent “generator replacement coordinator” to oversee the proposed process.
The generator replacement proposal would affect a major portion of the West where PacifiCorp, with customers in California, Idaho, Oregon, Utah, Washington and Wyoming, is the largest grid operator. The utility company provides transmission service in nine states.
PacifiCorp stands to unfairly benefit from its proposal, according to NewSun, a renewable energy developer in the Northwest. PacifiCorp in a March update to its 2021 resource plan said it expects to retire 14 of its 22 coal-fired units by 2030, and another five units by 2040.
“PacifiCorp’s filing makes clear that, if its proposal is adopted, replacements of these units will be given access to scarce transmission capacity on significantly more favorable terms than its competitors in the generation market,” NewSun said.
The proposal would “tilt the competitive landscape sharply in PacifiCorp’s favor, allowing it to lock in its dominant position in the generation market,” NewSun said.
According to UAMPS, “it would be unsurprising if PacifiCorp attempted to leverage its control over the transmission system to tilt interconnection rules in its favor so that it can maintain its generation market share as cheaply as possible.”
The proposed generator replacement coordinator may not be able to prevent unfair practices by PacifiCorp, UAMPS said.
“Its role, while important, will not address broader anti-competition concerns, such as whether there are generators in the queue who would save millions of dollars in network upgrades if permitted to use the interconnection capacity made available by a retiring generator,” UAMPS said.
The Western Power Trading Forum said FERC should take a broad review of interconnection rules for replacing generation, a situation “fraught with opportunities for anti-competitive behavior.”
The WPTF, UAMPS and NewSun said PacifiCorp failed to provide adequate notice of its proposals.
“If the filing is not rejected for procedural failures, it should be rejected on substantive grounds because the result will be to undermine competition in the wholesale markets and to provide PacifiCorp with what amounts to a free pass to maintain its dominance of generation markets in the Western United States,” NewSun said.
A PacifiCorp spokesperson wasn’t available to respond to the comments by WPTF, UAMPS and NewSun.
PacifiCorp asked FERC to accept its proposals by Jan. 10 ahead of its clustered interconnection request window to give generator owners with planned retirements time to evaluate their options.