FERC certifies tax credits for four projects, rejects three others

The Federal Energy Regulatory Commission has certified incremental generation at four more hydroelectric projects for renewable energy production tax credits. FERC also rejected certification for three other projects.

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.

FERC certifies another unit upgrade at 721-MW Clark Fork

FERC approved a request by Avista Utilities for additional certification of incremental generation at the 721-MW Clark Fork project (No. 2058) on the Clark Fork River in Idaho and Montana.

Certification is for efficiency improvements from installation of a new turbine runner on Unit 4 of the project’s 456-MW Noxon Rapids development in Montana. Earlier this year, FERC certified improvements from a new runner on Unit 2. In 2011, FERC certified or recertified the incremental generation resulting from three separate upgrades at Clark Fork.

FERC found Clark Fork had an annual historical generation baseline of 2,760,013 MWh and incremental generation of 9,548 MWh, a 0.35 percent increase, for new total generation of 2,769,561 MWh.

NextEra wins certification of two more FPL projects in Maine

FERC approved requests by NextEra Energy Maine Operating Services LLC for certification of incremental generation at two projects in Maine, 7.812-MW West Buxton and 37.232-MW Gulf Island-Deer Rips, for replacement of flashboards with inflatable flashboard systems.

Earlier this year, FERC certified incremental generation at FPL Energy’s 14.75-MW Weston and 7.2-MW Bonny Eagle projects in Maine.

FERC found West Buxton (No. 2531) on the Saco River has annual historical baseline generation of 32,514 MWh and new annual generation of 33,394 MWh, an increase of 894 MWh or 2.75 percent.

It found the Deer Rips and Androscoggin 3 developments of Gulf Island-Deer Rips (No. 2283) on the Androscoggin River have annual historical baseline generation of 62,479 MWh and new annual generation of 65,456 MWh, an increase of 2,977 MWh or 4.77 percent.

Certification approved for 574.54-MW Conowingo

FERC approved a request by Exelon Generating Co. LLC to certify incremental generation at the 574.54-MW Conowingo project (No. 405) on the Susquehanna River in Maryland

Exelon requested certification for installation of new stators on Units 9, 10, and 11. The stator installation followed a $39 million rehabilitation of Conowingo completed in 2008.

FERC found Conowingo had annual historical baseline generation of 1,836,301 MWh and increased generation of 254 MWh, or 0.0138 percent, for improvements to Unit 10 in 2010; increased generation of 241 MWh, or 0.0131 percent, for improvements to Unit 11 in 2011; and increased generation of 273 MWh, or 0.0148 percent, for improvements to Unit 9 in 2012.

FERC rejects certification for Muddy Run, Yadkin-Pee Dee, Taum Sauk

The commission rejected requests to certify three projects for production tax credits, saying the project modifications did not constitute efficiency improvements.

880-MW Muddy Run

Exelon had filed an application with FERC for certification of incremental generation from switchgear replacement and installation of a headcover packing box at the 880-MW Muddy Run Pumped-Storage project (No. 2365) on the Susquehanna River in Pennsylvania.

Exelon said replacing switchgear on Units 1, 3, 4, 7, and 8 would reduce downtime for inspections, thereby increasing incremental generation between .64 and .85 percent for each unit. It said installing a headcover packing box would increase incremental generation .61 percent. In both cases, Exelon said the improvements would reduce maintenance downtime of the generating units.

FERC noted the Energy Policy Act of 2005 provides for FERC certification of annual hydropower production attributable to “efficiency improvements or additions to capacity.”

“We conclude that the avoided downtime of the units, due to the replacement of headcover packing box and switchgears, and the computation of the increment in annual generation is rather speculative,” Director Edward Abrams of FERC’s Division of Hydropower Administration and Compliance, wrote. “Further, these actions do not contribute to any improvements in the performance efficiency curves of the generating units. As such they are not considered efficiency improvements under Section 1301 of the EPAct.”

108.6-MW Yadkin-Pee Dee

Similarly, FERC rejected certification of incremental generation sought by Progress Energy Carolinas Inc. for its 108.6-MW Yadkin-Pee Dee project on the Yadkin and Pee Dee rivers in North Carolina.

Progress said it installed a dissolved oxygen enhancement system in the reservoir of the project’s 84-MW Tillery development, in response to North Carolina’s water quality certification for the project’s relicensing, which mandated improved dissolved oxygen levels.

Progress argued that without the DO enhancement system, Yadkin-Pee Dee would have been required to release a bypass flow of 3,000 cfs, which would have decreased generation. It therefore requested that FERC certify the amount of that potential decreased generation as an incremental increase in production due to the DO enhancement system.

“Installing a DO enhancement system that results in increased generation relative to a theoretical baseline rather than to actual pre-existing flows does not qualify as an incremental increase in generation,” Abrams wrote.

440-MW Taum Sauk

FERC also rejected certification of incremental generation resulting from replacement of the failed upper reservoir of the 440-MW Taum Sauk Pumped-Storage project (No. 2277) in Missouri.

After the upper reservoir failed in 2005, licensee Ameren Missouri rebuilt the rockfill embankment dam of the upper reservoir in 2006-2010, replacing it with a roller-compacted-concrete dam.

Ameren requested certification saying the new concrete dam reduced leakage through the dam increasing water available for generation by Taum Sauk. It said the new dam also eliminated safety hazards, eliminating the need to lower the upper reservoir’s upper operating limit of 1,597 feet during winter months, also increasing water available for generation.

Abrams wrote that the rebuild of the upper dam is not considered an efficiency improvement under the Energy Policy Act.

“Rather, they are actions taken to properly maintain and operate the project as licensed,” he said.

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