FERC News, North America, Regulation and Policy

FERC certifies tax credits for projects in five states

The Federal Energy Regulatory Commission has certified incremental generation at four hydroelectric projects in five states for renewable energy production tax credits.

Newly licensed 6.5-MW Expanded Kansas project wins certification

FERC certified incremental generation at the 6.5-MW Expanded Kansas River project (No. 13526) in Kansas. FERC recently licensed the small hydro project on the Kansas River in only six months, one of several expedited licensings of small projects.

Licensee Bowersock Mills and Power Co. requested PTC certification based on the newly licensed addition of a north powerhouse, to contain four turbine-generators totaling 4.397 MW. Bowersock Mills Dam, which has generated electricity since 1905, has an existing south powerhouse containing seven units totaling 2.14 MW.

FERC ruled Sept. 30 that data from the licensee showed the project has a historical generation baseline of 10.8 million kilowatt-hours per year and an expected annual generation of 34.5 million kWh with the improvements. That would result in incremental generation of 23.7 million kWh, a 219.2 percent increase.

FERC certifies additional improvements to 28.8-MW London/Marmet

The commission also approved requests by hydro operator Appalachian Power Co. to certify incremental generation at the two developments of the 28.8-MW London/Marmet project (No. 1175) on the Kanawha River in Kanawha County, W.Va.

In June 30 and July 1 filings, Appalachian Power said it upgraded Unit 3 of its 16.099-MW London development and Unit 3 of its 12.7-MW Marmet development, returning them to service in May 2008 and May 2010. FERC certified other incremental generation at Marmet for tax credits in 2008.

FERC noted the London development has an annual historical generation baseline of 76.58 million kWh and incremental generation of 2.329 million kWh, an increase of 3 percent, while the Marmet development has an annual historical generation baseline of 66.79 million kWh and incremental generation of 4.34 million kWh, an increase of 6.5 percent.

Additional PTC certification won by 34.4-MW Gulf Island-Deer Rips

FERC also certified incremental generation for an upgrade of Unit 1 at the 34.4-MW Gulf Island-Deer Rips project (No. 2283) on the Androscoggin River in Maine.

The commission previously certified incremental generation for a similar refurbishment of Gulf Island-Deer Rips Unit 2. Licensee FPL Energy Maine Hydro LLC replaced the units’ runners and rewound the generators.

FERC noted the project has an annual historical generation baseline of 136.2 million kWh and incremental generation, with the Unit 1 upgrade, of 4.7 million kWh, a 3.49 percent increase.

Commission certifies new generation at 4.85-MW Gilman

The commission also approved the request of hydro operator Ampersand Gilman Hydro LP for certification of incremental generation at the 4.85-MW Gilman hydroelectric project on the Connecticut River in Vermont and New Hampshire.

Ampersand Gilman said it completed four efficiency improvement projects since it took operational control of the Gilman project (No. 2392) in August 2008. It sought certification of efficiency improvements for 2008 and 2009.

FERC found the project has an annual historical generation baseline of 22.3 million kWh for 2008 and incremental generation of 2.4 million kWh, an increase of 10.8 percent for that year. For 2009, it listed an increased historical generation baseline of 24.5 million kWh and new incremental generation of 1.2 million kWh, an additional increase of 4.89 percent for that year.

Puget seeks tax grant for new 30-MW plant at 170-MW Baker River

Puget Sound Energy has filed an application with FERC for certification of the incremental generation that will result from a new 30-MW powerhouse at its 170.03-MW Baker River hydroelectric project (No. 2150) on the Baker River in northwest Washington.

FERC relicensed the Baker River project in 2008, authorizing the new powerhouse and granting the utility another 50 years to operate the project. PSE this year completed a new fish hatchery and upstream trap-and-haul facility on the Baker River as part of the relicensing conditions for the two-dam project.

Instead of seeking certification for a production tax credit, PSE asked FERC for a tax grant in lieu of the PTC, as allowed under the American Recovery and Reinvestment Act of 2009. A request for FERC certification is a prerequisite for issuance of a tax grant by the Treasury Department. Production tax credits are granted by the Internal Revenue Service, also based on FERC certification of incremental generation.

PSE noted the Baker River project’s annual historical generation baseline is 376.7 million kWh. However, that would drop to 277 million kWh as a result of conditions added to the existing project’s operations under terms of the relicense. With the addition of the new powerhouse, PSE estimated Baker River’s annual generation would go back up to 386.5 million kWh. That would result in incremental generation of 109.48 million kWh, an increase of nearly 40 percent.

Additional certification sought for 456-MW Noxon Rapids

Licensee Avista Utilities has asked FERC to certify incremental generation for a PTC from the upgrade of Unit 3 at its 456-MW Noxon Rapids hydroelectric development in Montana.

Noxon Rapids, on Clark Fork River, is one of two plants in Avista’s Clark Fork project (No. 2058). The other, 265-MW Cabinet Gorge, is about 20 miles downstream. FERC certified incremental generation at Noxon Rapids Unit 1 in January.

The licensee seeks a production tax credit for efficiency improvements from replacing Unit 3’s turbine runner with a new high-efficiency runner. Avista is spending $35 million to upgrade Noxon Rapids. When work on four 50-year-old units is complete in 2012, Avista expects the plant to provide about 28 MW of additional base load capacity.

Avista calculated Clark Fork’s annual historical generation baseline at 2.79 billion kWh, and incremental generation from the improvement of 18.39 million kWh, an increase of 0.66 percent in generation.

PTC certification sought for 2-MW Elk Creek

Exemptee El Dorado Hydro asked FERC on Sept. 8 to certify incremental generation resulting from the replacement of a turbine runner at the 2-MW Elk Creek hydroelectric project (No. 3505) on Elk Creek, a tributary of Idaho’s Little Salmon River.

El Dorado, a unit of Enel North America Inc., said it replaced the existing unit in January. It calculated the project’s annual historical generation baseline at 3.7 million kWh, with incremental generation of 153,045 kWh, an increase of 4.1 percent.

FERC has certified incremental generation of several dozen hydro projects since August 2005. The Energy Policy Act of 2005 amended the Internal Revenue Code to apply a production tax credit to incremental production gains from efficiency improvements or capacity additions to existing hydropower facilities placed in service after Aug. 8, 2005, and before Jan. 1, 2014. The Internal Revenue Service determines whether to grant the credits after FERC certifies hydropower production.

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