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FERC again rejects Sunflower complaint over Kansas deal

Sunflower Electric Power lost a second time last week in its bid to recover $5 million it claims it is owed for “backstopping” a power-supply arrangement between Kansas Municipal Energy Agency and Garden City, Kan.

FERC denied Sunflower’s request for a rehearing of a July 2014 order that rejected its complaint (EL14-38-001).

The Kansas-based cooperative had charged the arrangement was unfair and violated FERC and SPP rules, and SPP’s Tariff. Sunflower alleged Kansas Municipal’s firm capacity and firm transmission were insufficient to supply Garden City during January and February 2014 and that delivering wind energy to Garden City did not meet SPP’s dynamic scheduling rules governing the transfer of energy from one control area to another.

By failing to comply with dynamic scheduling requirements, Sunflower said, Kansas Municipal violated North American Electric Corp. reliability standards.

Sunflower said it was entitled to $5.1 million in compensation for backstopping Kansas Municipal with imbalance energy, ancillary services and firm capacity and for Kansas Municipal’s reliance on the energy imbalance services (EIS) market. Sunflower also asked FERC to eliminate Kansas Municipal’s “unfair marketing advantages” and practices it said threatened grid reliability.

Sunflower was the balancing authority for the area before SPP launched its Integrated Marketplace in March 2014. The dispute arose after Garden City dropped its supply contract with Wheatland Electric Cooperative, a Sunflower member, and switched to Kansas Municipal to supply its 71.5-MW load in January 2014.

FERC denied Sunflower’s complaint in July 2014, saying the cooperative failed to meet its burden of proof.

The commission noted there was no network integration transmission service agreement (NITSA) violation because the wind resources were short-term and, therefore, not part of the NITSA. FERC also pointed out SPP’s Market Monitoring Unit found no violation of the Tariff or evidence that Kansas Municipal negatively affected SPP’s EIS market.

The commission held that neither Kansas Municipal nor SPP could violate the NERC standard in question, “because neither entity was registered as a balancing authority with NERC during the relevant time period,” and that neither Kansas Municipal nor SPP “had any obligation with regard to dynamic scheduling.”

In Sunflower’s rehearing request, it charged that FERC erred in finding Sunflower failed to meet its burden of proof and determining that the supply arrangement did not violate the Tariff.

In denying Sunflower’s request for a rehearing and clarification of the July 2014 order, FERC said the cooperative’s request fell outside the order’s holdings.

“The complaint order principally rested on Sunflower failing to meet its burden of proof,” FERC said. “In contrast, Sunflower’s requests for clarification are general questions regarding the operation of the SPP Tariff. The requests are not specific to the instant proceeding and are inappropriate to raise at this late stage of the proceeding.”