Wind Power and the CREZ Case: What’s Decided, What’s Not, What’s Next. Patrick R. Cowlishaw Jackson Walker LLP SBOT Public Utility Law Section August 15, 2008. Background: The CREZ Mandate ( SB 20, 79 th Leg., 2005).
Patrick R. Cowlishaw
Jackson Walker LLP
SBOT Public Utility Law Section
August 15, 2008
Contested cases (first in 2007, thereafter as PUC sees need)
Final order to contain, for each CREZ:
geographic extent of CREZ
major transmission improvements to deliver CREZ output to customers (voltage level, general description of interconnection to existing grid)
estimated maximum generating capacity the TM improvements can accommodate
other requirements considered appropriate by PUC under PURA
generator financial commitment
implementing transmission plan
developer to operate within 1 year after CREZ TM is ready
PUC authority to limit interconnection to CREZ TM system, establish dispatch priorities to protect against excess development
PUC Subst. R. 25.174 (Project 31852)Background:The CREZ Rule
Docket opened January 2007
Interim Order (Oct. 2007)
Reliability region issues
If CTP Facility is an
Existing facility upgrade: owner will be selected as TSP unless requests otherwise or good cause
New facility: PUC to select TSP
capabilities to finance, license, operate, maintain facility; cost projections; proposed schedule; use of HUBs; track record; project understanding
reduced filing requirements for unopposed CTP Proposals
CREZ TSP Selection Under Way in Docket 35665
Settlement conferences to expedite selection
Initial expressions of interest
competition for large projects
31 owner upgrades
CTP Proposals due 9/12
selections due within 180 days by rule (3/11/09)
Merits hearing 12/1-5What’s Not and What’s Next:Who Will Build, Operate The CREZ Transmission?
45 days after CCN app for CREZ TM improvements, each developer for that CREZ to post LC/collateral
10% of developer’s pro rata share of estimated capital cost of TM improvements covered by CREZ order
Deposit shortfalls may result in reconsidering CREZ designation, CCN denial, replacing defaulting developer, other “appropriate action”
Potentially requires developers to post in range of $ 500 MM collateral to support S2 build-out
Which improvements apply, e.g. “ASAP” lines relieving current congestion (RPG v. CREZ)?
Which improvements go with which zones? Must every CREZ developer post in every case?
Who can participate?
Project size to be updated?
10% of what? Developer’s planned CREZ MW ÷ CREZ TM capacity? How to adjust for oversubscription?
Where to address ?s without delay of CCN proceedings?What’s Not and What’s Next:Developer “10%” Deposits in CCN Proceedings
Financial commitment to obtain CREZ designation
Investment to be ready to take TM service 1 year after CREZ TM complete
What rights associated with these commitments?
Business case requires some reasonable assurance of access to CREZ TM
CREZ Rule 25.174(e):
PUC may initiate proceeding and limit IC or set dispatch priorities
If aggregate renewable capacity requesting TM service for a CREZ exceeds maximum stated in CREZ order
proposed CREZ wind (20,000+ MW) v. S2 TM capacity (11,553)
Factors may include financial commitment filed to support CREZ designation, deposit
Express, limited authorization to restrict open accessWhat’s Not and What’s Next:Dispatch Priority
Consistent with open access, wind project located outside a CREZ is not “automatically ineligible to interconnect” with CREZ TM line
In any subsequent DP proceeding, developers within a CREZ who submitted financial commitment evidence in CREZ docket “will likely fare better” than others
Issues (for Project 34577)
Allocating limited export capacity among projects within a CREZ
CREZ project access to CREZ TM v. wind, other generation outside CREZ, e.g., “downstream” interconnectors
Wind curtailment before nuclear, (?) clean coal
DP mechanism must mesh with nodal market
Transferability, durationWhat’s Not and What’s Next:Dispatch Priority
Be “bold and cautious, visionary and practical.” (Chairman Smitherman)
A color copy of this presentation is available for download at www.jw.com/pcowlishaw. For more information, contact Pat Cowlishaw at 214.953.6049 or [email protected]