FERC Finds As-Filed Ginna RMR Contract Unreasonable, Sets Matter for Hearing

FERC rejected the as-filed version of an RMR contract for Exelon's Ginna nuclear reactor, but set the matter for hearing to determine whether the contract is appropriate when certain provisions are eliminated.

Specifically, FERC rejected Ginna’s proposed provision allowing it to receive a 15 percent share of its NYISO market revenues, as FERC found that this provision, "does not comport with the general principle that rates under an RMR Agreement must be cost-based."

"A compensation structure that provides for both a cost-based monthly fixed rate (whether going-forward costs at the low end, or a full cost of service at the upper end) and a share of market revenues does not meet this principle, as the revenue sharing provision is not cost-based and may allow for Ginna to earn more than its full cost of service. Accordingly, we reject the proposed 15 percent revenue component of the proposed RSSA rates and that issue also should not be addressed at hearing," FERC said.

FERC set the larger questions of the contract for hearing, stating that RMR rates should be established that are not lower than the level required to recover Ginna’s going-forward costs, but not higher than the level required to recover its full cost of service

Docket No. ER15-1047