FERC Accepts Settlement to Allow Limited Self-Supply of Capacity at AEP Utility for Retail Providers, Also Sets Rates

FERC has accepted a settlement which sets rates for wholesale capacity that Appalachian Power Company makes available to electric competitive service providers (CSPs) in APCo's Virginia service territory, and which also provides for a limited amount of self-supplied capacity by CSPs.

The settlement was reached between Appalachian Power and competitive supplier Collegiate Clean Energy, LLC.

The settlement provides that a formula rate will set the capacity charge generally applicable to retail suppliers operating in APCo, who take capacity under AEP's fixed resource requirement. Using 2011 cost data, the capacity charge under the formula is $472/MW-day.

However, the adopted settlement also includes a Renewable Self-Supply Program that APCo has agreed to implement in order to enable qualifying retail providers to self-supply a certain amount of capacity associated with the retail load that they serve in APCo's Virginia service territory in lieu of being subject to capacity payments under the settlement formula. The program is intended to run through May 31, 2016, after which time retail providers may make self-supply arrangements under the terms of the PJM RAA.

The adopted settlement provides that APCo will establish an open season during which qualifying retail providers may request the right to participate in the Renewable Self-Supply Program, under which they must self-supply renewable capacity. The open season will be conducted on the APCo CSP web site, and will begin five business days after the settlement agreement becomes effective (generally meaning the FERC approval), and will remain open for five business days thereafter.

The Renewable Self-Supply Program is subject to a limit on the self-supply capacity provided by individual qualifying CSPs (Single CSP Limit) and an aggregate limit for all CSPs (Aggregate Limit).

The self-supply capacity limits are as follows:

Year      Single CSP Limit     Aggregate Limit
2013/14      10.0 MW              15.0 MW
2014/15      12.5 MW              17.5 MW
2015/16      15.0 MW              20.0 MW

A pro rata allocation of the self-supply capacity shall occur in the event that APCo receives requests, for any given PJM Delivery Year, to self-supply capacity that exceed the aggregate limit. If the aggregate limit is not reached, unused capacity under the aggregate limit may be allocated to CSPs desiring to self-supply capacity above the individual CSP limit, on a first-come, first-served basis.

For each PJM Delivery Year in which a CSP has been awarded a self-supply capacity reservation through the open season, the CSP must place its renewable capacity resources in APCo's FRR plan before the CSP may begin serving retail load under the program.

Docket ER13-539