[Federal Register: November 29, 2005 (Volume 70, Number 228)]
[Notices]
[Page 71479-71480]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29no05-43]
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DEPARTMENT OF ENERGY
Federal Energy Regulatory Commission
Order Addressing Change in Status Filing and Providing Guidance
Issued November 17, 2005.
Before Commissioners: Joseph T. Kelliher, Chairman; Nora Mead
Brownell, and Suedeen G. Kelly.
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Docket Nos.
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Calpine Energy Services, LP........................... ER00-3562-003;
ER05-817-001;
Calpine PowerAmerica-OR, LLC.......................... ER03-341-002
Calpine PowerAmerica-CA, LLC.......................... ER03-342-002
Power Contract Financing, LLC......................... ER03-838-003
PCF2, LLC............................................. ER04-1081-001
Calpine Energy Management, LP......................... ER04-1080-001
CES Marketing V, LP................................... ER03-209-002
Calpine Northbrook Energy Marketing, LLC.............. ER03-36-004
MEP Pleasant Hill, LLC................................ ER99-2858-008
Calpine Bethpage 3, LLC............................... ER05-48-001
Ontelaunee Power Operating Company, LLC............... ER05-1266-001
CES Marketing VIII, LLC............................... ER05-818-001
CES Marketing IX, LLC................................. ER05-819-001
CES Marketing X, LLC.................................. ER05-820-001
Zion Energy, LLC...................................... ER02-1319-004
Calpine Newark, LLC................................... ER04-831-002
Calpine Parlin, LLC................................... ER04-832-002
Calpine Construction Finance Company, LP.............. ER00-1115-003
Calpine Philadelphia Energy, Inc...................... ER03-446-002
CPN Bethpage 3rd Turbine, Inc......................... ER02-1959-003
Bethpage Energy Center 3, LLC......................... ER04-1099-001
TBG Cogen Partners.................................... ER04-1100-001
Gilroy Energy Center, LLC............................. ER01-2688-008
Creed Energy Center, LLC.............................. ER02-2227-004
Delta Energy Center, LLC.............................. ER02-600-006
Goose Haven Energy Center, LLC........................ ER02-2229-003
Los Esteros Critical Energy Facility, LLC............. ER03-24-003
Metcalf Energy Center, LLC............................ ER05-67-001
Pastoria Energy Facility LLC.......................... ER05-68-001
Geysers Power Company, LLC............................ ER99-1983-003
Calpine California Equipment Finance Company, LLC..... ER03-290-002
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1. In this order, the Commission accepts a notice of change in
status filed by Calpine Energy Services, L.P. (CES) and its affiliated
public utilities (collectively, the Calpine Entities), to report a
change in status that reflects a departure from the characteristics
that the Commission relied upon in granting these entities market-based
rate authority, pursuant to the reporting requirements of Order No.
652.\1\ For the reasons discussed below, and based on Calpine Entities'
representations, we accept the Calpine Entities' change in status
filing.
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\1\ Reporting Requirement for Changes in Status for Public
Utilities with Market-Based Rate Authority, FERC Stats. & Regs.,
Regulations Preambles III ] 31,175 (Feb. 10, 2005) (Order No. 652),
order on reh'g, 111 FERC ] 61,413 (2005). 18 CFR 35.27(c) (2005).
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Background
2. On September 9, 2005, CES and the Calpine Entities filed a
notice of change in status to report that CES, a power marketer, had
entered into two Energy Management Agreements regarding certain third
party-owned electric generating assets as described below. In addition,
the Calpine Entities state that CES anticipates entering into a third
such agreement, as also described below. The Calpine Entities state
that under the Commission's regulations, they are required to report
any change in status that would reflect a departure from the
characteristics the Commission relied upon in granting them market-
based rate authority.\2\ The Calpine Entities assert that they are
providing this notice here out of an abundance of caution based on
their belief that the Energy Management Agreements described in their
filing do not constitute a change in status, as contemplated by the
Commission's regulations. The Calpine Entities claim that CES will not
acquire control of the facilities at issue under these agreements.\3\
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\2\ See, e.g., 18 CFR 35.27(c)(1) (defining a ``change in
status'' to include, but not be limited to, ``ownership or control
of generating or transmission facilities or inputs to electric power
production other than fuel supplies.'').
\3\ The agreements themselves were not included by the Calpine
Entities in their submittal.
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3. The Calpine Entities state that even assuming CES is deemed to
acquire control of these facilities, this authority would not alter the
Commission's prior determinations that CES and its affiliates satisfy
the Commission's four-part test for market based rate authority.
The IECC Agreement
4. The Calpine Entities state that on July 29, 2005, CES and Inland
Empire Energy Center, LLC (IECC) entered into an Energy Management
Agreement (IECC Agreement), pursuant to which CES will provide certain
services to IECC, the owner of a 775 MW natural gas-fired electric
generating facility located in Riverside County, California (IECC
Facility). The Calpine Entities state that the IECC Facility is
expected to begin commercial operations in 2008, with the output of the
facility to be delivered into the transmission system operated by the
California Independent System Operator, Inc. (CAISO).
5. The Calpine Entities state that CES will act as IECC's agent to
market and schedule the energy, capacity, ancillary services, and any
other product produced by the IECC Facility and arrange for the
procurement and maintenance of transmission service for the products
produced by the IECC Facility. CES states it will also arrange for the
procurement and scheduling of natural gas supplies for use at the IECC
Facility. The Calpine Entities state that IECC will be the operator of
the IECC Facility and that CES will act pursuant to orders from IECC.
CES states it will have limited discretion as to prices for which it
sells the output of the IECC Facility and purchases products used to
generate the IECC's Facility's output and deliver this output to third
parties.
The POA Agreement
6. The Calpine Entities state that on August 5, 2005, CES and
Project Orange Associates, L.L.C. (POA) entered into an Energy
Management Agreement (POA Agreement), pursuant to which CES will
provide certain services to POA, the owner of an 80 MW natural gas-
fired cogeneration facility located in Syracuse, New York (POA
Facility). The Calpine Entities state that the output of the POA
Facility will be sold into the markets operated by the New York
Independent System Operator (NYISO). CES states that it will act as
POA's agent and, as directed by POA, bid, schedule, and sell the output
of the POA Facility in the NYISO market. CES also states it will
schedule natural gas transportation deliveries and assist in managing
POA's pipeline imbalances. The Calpine Entities state that CES will
have limited discretion concerning the prices for which it sells the
output of the POA Facility and purchases fuel and other products.
[[Page 71480]]
The OPOC Agreement
7. The Calpine Entities state that CES and Ontelaunee Power
Operating Company, LLC (OPOC) expect to enter into an Energy Management
Agreement in September 2005 (OPOC Agreement), pursuant to which CES
will provide certain services to OPOC, the owner of a 587 MW electric
generation facility located in Reading, Pennsylvania. The Calpine
Entities state that the output of the facility will be sold into the
markets operated by PJM Interconnection, L.L.C. (PJM). CES states that
it will provide the following services at the direction of, and subject
to the approval of, OPOC: Power management services (including
marketing, bidding, and scheduling), fuel management, and risk
management services. CES states that it will have the authority to
enter into transactions for the purchase or sale of fuel or power with
a term of 31 days or less. In addition, the Calpine Entities state that
the authority for CES to execute other types of transactions could be
delegated by OPOC from time-to-time by written notice.
8. Finally, the Calpine Entities include in their submittal tariff
revisions for those of their affiliates who have not previously filed
to revise their market-based rate tariffs to include the reporting
requirement for changes in status, as required by Order No. 652.
9. Notice of the Calpine Entities' submittal was published in the
Federal Register,\4\ with interventions or protests due on or before
October 11, 2005. None was filed.
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\4\ 70 FR 57,573 (2005).
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Discussion
10. For the reasons discussed below, we will accept the Calpine
Entities' notice of change in status, as it relates to the POA
Agreement and the OPOC Agreement. We will not address, at this time,
the Calpine Entities' representations as they relate to the IECC
Agreement, given the premature nature of any evaluation concerning
market conditions in the CAISO market as of the IECC Facility's
projected 2008 in-service date.
11. Order No. 652 requires that a seller with market-based rate
authority notify the Commission of a change in status that would
reflect a departure from the characteristics relied upon by the
Commission in granting the seller market-based rate authority. Section
35.27(c)(1) of the Commission's regulations defines a change in status
to include but not be limited to ``ownership or control of generation
or transmission facilities or inputs to electric power production other
than fuel supplies.''
12. The Calpine Entities state that under the Energy Management
Agreements described herein CES will not exercise control over the
generating facilities at issue (i.e., over the IECC Facility, the POA
Facility, or the OPOC Facility), as contemplated by Order No. 652.\5\
However, we cannot make this determination here based on the record
before us, in the absence of the agreements at issue and/or a more
detailed description of the services provided under these agreements
and their effect on the Calpine Entities' market power analyses.
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\5\ ``In short, if an applicant has control over certain
capacity such that the applicant can affect the ability of the
capacity to reach the relevant market, then the capacity should be
attributed to the applicant when performing the generation market
power screens.'' Order No. 652 at P 47.
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13. We clarify, in this regard, that sellers making a change in
status filing to report an energy management agreement are required to
make an affirmative statement in their filing as to whether the
agreement at issue transfers control of any assets and whether the
agreement results in any material effect on the conditions that the
Commission relied upon for the grant of their market-based rate
authority. On some occasions, and at the Commission's discretion, the
Commission may request the seller to submit a copy of the agreement and
provide supporting documentation.
14. We further clarify that a seller making a change in status
filing is required to state whether it has made a filing pursuant to
section 203 of the Federal Power Act.\6\ To the extent the seller has
made a section 203 filing that it submits is being made out of an
abundance of caution and thus has voluntarily consented to the
Commission's section 203 jurisdiction, the seller will be required to
incorporate this same assumption in its market-based rate change in
status filing (e.g., if the seller assumes that it will control a
jurisdictional facility in a section 203 filing, it should make that
same assumption in its market-based rate change in status filing and,
on that basis, inform the Commission as to whether there is any
material effect on its market-based rate authority).\7\
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\6\ 16 U.S.C. 824b (2000).
\7\ Order No. 652 at P 35.
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15. The Calpine Entities argue that even assuming that CES will
control the capacity attributable to its Energy Management Agreements,
neither CES nor any of its affiliates would possess generation market
power in the relevant markets (i.e., in the CAISO, PJM, or the NYISO),
or fail to satisfy the Commission's other requirements applicable to
their market-based rate authority.\8\
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\8\ The Calpine Entities rely, in this regard, on their recently
submitted triennial review analyses, for each of these three
markets.
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16. We agree that even attributing the capacity associated with the
POA Facility and the OPOC Facility to the Calpine Entities would not
alter our recent determinations that the Calpine Entities, in these
markets (i.e., in the NYISO and PJM), continue to satisfy our
requirements applicable to the grant of their market-based rate
authority.\9\ However, as noted above, we cannot decide this issue at
this time, as it relates to the IECC Facility, which is not scheduled
to become operational until 2008. A change in status filing regarding
CES' agreement with regard to the IECC Facility should be made by the
Calpine Entities no later than 30 days after the IECC Facility becomes
operational.
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\9\ See Creed Energy Center, LLC, Docket No. ER02-2227-003,
(November 2, 2005) (unpublished letter order). See also CES
Marketing VI, LLC et al., 111 FERC ] 61,261 (2005).
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17. Finally, we will accept for filing the Calpine Entities'
proposed tariff revisions incorporating the reporting requirement for
changes in status, as required by Order No. 652.
The Commission Orders
(A) The Calpine Entities' notice of change in status and proposed
tariff revisions are hereby accepted for filing, in part, as discussed
in the body of this order.
(B) The Secretary is directed to publish a copy of this order in
the Federal Register.
By the Commission.
Magalie R. Salas,
Secretary.
[FR Doc. 05-23468 Filed 11-28-05; 8:45 am]
BILLING CODE 6717-01-P