[Federal Register Volume 85, Number 202 (Monday, October 19, 2020)]
[Notices]
[Pages 66324-66327]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23113]
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DEPARTMENT OF ENERGY
Southeastern Power Administration
Revision to Power Marketing Policy Kerr-Philpott System of
Projects
AGENCY: Southeastern Power Administration, DOE.
ACTION: Notice of revision to power marketing policy.
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SUMMARY: Southeastern Power Administration (Southeastern or SEPA)
announces revision to the power marketing policy for the Kerr-Philpott
System of Projects (Kerr-Philpott System). The Kerr-Philpott System
power marketing policy was published on July 29, 1985, and is reflected
in contracts for the sale of system power, which are maintained in
Southeastern's headquarters office. Pursuant to the Procedure for
Public Participation in the Formulation of Marketing Policy, published
in the Federal Register of July 6, 1978, Southeastern published on
November 15, 2019, a notice of intent to revise the power marketing
policy to include provisions regarding renewable energy certificates
(RECs) from the Kerr-Philpott System. The proposed revision
[[Page 66325]]
to the Kerr-Philpott System Power Marketing Policy was published in the
Federal Register on June 19, 2020. A virtual web based public
information and comment forum was held on August 18, 2020, with written
comments due on or before September 2, 2020.
DATES: The power marketing policy revision will become effective upon
publication of this notice in the Federal Register.
FOR FURTHER INFORMATION CONTACT: Douglas Spencer, Engineer,
Southeastern Power Administration, 1166 Athens Tech Road, Elberton, GA
30635, (706) 213-3855, Email: [email protected].
SUPPLEMENTARY INFORMATION:
Background: Southeastern published a ``Notice of Issuance of Final
Power Marketing Policy Kerr-Philpott System of Projects'' in the
Federal Register on July 29, 1985, 50 FR 30751. The policy establishes
the marketing area for system power and addresses the utilization of
area utility systems for essential purposes. The policy also addresses
wholesale rates, resale rates, and conservation measures, but does not
address renewable energy certificates.
Under Section 5 of the Flood Control Act of 1944 (16 U.S.C. 825s),
Southeastern is responsible for the transmission and disposition of
electric power and energy from reservoir projects operated by the U. S.
Army Corps of Engineers. Furthermore, Southeastern must transmit and
dispose of power and energy in such a manner as to encourage the most
widespread use at the lowest possible rates to consumers consistent
with sound business principles. Rate schedules are developed with
regard to the recovery of the cost of producing and transmitting such
electric energy.
The Kerr-Philpott System consists of two projects, the John H. Kerr
Project (Kerr) and the Philpott Project (Philpott). The power from the
projects is currently marketed to Preference Customers located in the
service areas of Dominion Energy, Duke Energy Progress, American
Municipal Power, and American Electric Power.
Both the Kerr and Philpott Projects are located within the regional
footprint served by the regional transmission organization PJM
Interconnection, L.L.C. (PJM), as are the Virginia-based Preference
Customers with power allocations. Southeastern owns no transmission
assets and relies on PJM transmission resources to dispose of power and
energy from the projects. As such, Southeastern joined PJM in 2005.
As the projects are located within the PJM region and potentially
satisfy Renewable Portfolio Standards in a number of states,
Southeastern has subscribed to the Generation Attribute Tracking System
(GATS) of PJM Environmental Information Services, Inc. The GATS
provides an unbundled, certificates-based tracking system that reports
certain operating attributes of electricity generators selling energy
through the PJM Market Settlement System. The attributes are unbundled
from the megawatt-hour of energy produced and recorded onto a
certificate. As indicated in Section (2) of the GATS TERMS OF USE,
dated January 22, 2020, these certificates may be used by electricity
suppliers and other energy market participants to comply with relevant
state policies and regulatory programs and to support voluntary
``green'' electricity markets.
Under the following revision of the 1985 power marketing policy,
Southeastern will distribute the GATS-created certificates to current
Preference Customers with allocations of power from the Kerr-Philpott
System.
Public Notice and Comment
Southeastern published a proposed revision in the Federal Register,
85 FR 37092, dated June 19, 2020. Southeastern held a web-based
information and comment forum, on August 18, 2020. The forum was held
virtually due to travel restrictions related to the COVID-19 pandemic.
Southeastern received comments from Blue Ridge Power Agency, Tennessee
Valley Public Power Association, and Southeastern Federal Power
Customers, Inc.
Public Comments
Written and oral comments are summarized below. Southeastern's
responses follow each comment.
Comment 1: Tennessee Valley Public Power Association requested
``that prior to SEPA setting any policies, procedures or administrative
controls regarding the ownership or use of Renewable Energy Credits
associated with additional hydro generation as a result of Section 212
funding, that SEPA consult with and incorporate comments from the
Preference Customers that authorized the Section 212 funding.''
Response 1: TVPPA has referenced ``Section 212 funding''. ``Section
212 funding'' refers to section 212 of the Water Resources Development
Act of 2000, Public Law 106-541, which amended section 216 of the Water
Resources Development Act of 1996 (codified at 33 U.S.C. 2321a). The
provision allows the Secretary of the Army to accept and use funds for
use in hydroelectric power project uprating provided by preference
customers through contracts related to the marketing of power.
Therefore, funds provided by certain preference customers may increase
energy at the John H. Kerr and Philpott projects. Southeastern has
considered comments of customers participating in the Section 212
customer funding program. Any increase in energy due to the Section 212
program will be distributed in accordance with this published revision
of the Kerr-Philpott power marketing policy.
Comment 2: Blue Ridge Power Agency members expressed appreciation
they will have the choice on how to use the RECs to provide benefits
for their customers. They support Southeastern's proposed policy to
distribute RECs based on existing power allocations, and to separate
out energy from each generator. They indicate enabling customers to
take RECs from each project is the fairest way to proceed, and allowing
each customer to designate whether the RECs are transferred to a third
party or directly to the customer is important. They encourage
Southeastern to work aggressively on state REC registrations for each
generator.
Response 2: Southeastern acknowledges Blue Ridge Power Agency
members' comments regarding distribution of RECs in the Kerr-Philpott
System. Southeastern continues to pursue state REC registrations for
both the Kerr and Philpott projects.
Comment 3: Southeastern Federal Power Customers, Inc. (SeFPC),
expressed general support for the revision and addressed three areas of
concern which include: (1) The revision for the Kerr-Philpott System
should be clear that it will not establish controlling precedent on
policies for the allocations for RECs that SEPA may adopt in the future
for other marketing areas; (2) The revision should include language
from the response to comments to the notice of intent to revise the
power marketing policy that stated that the revision will not change
the Administrator's prior determinations regarding power allocation
within the marketing area; and (3) That SEPA should further clarify
``SEPA reserves the right to distribute RECs that have been declined at
a later date.''
Response 3: Southeastern acknowledges SeFPC's comments regarding
distribution of RECs to Kerr-Philpott Preference Customers.
Southeastern added language to the
[[Page 66326]]
Power Marketing Policy Revision to address SeFPC's concerns.
Summary of Changes to the Power Marketing Policy Revision
Southeastern made further changes to the Power Marketing Policy
Revision as a result of comments received during the comment period and
public forum. Southeastern added language stating the revision will
only apply to the Kerr-Philpott marketing area and Southeastern may
revise other marketing policies through a public process at a later
date. Southeastern added language to state the revision will not change
the Administrator's prior decisions regarding the power allocations
within the Kerr-Philpott marketing area. Southeastern clarified
distributions may occur outside of the quarterly distributions when
preference entities have failed to submit proper distribution
information or when RECs collected prior to the implementation of the
policy are distributed. Southeastern amended the language regarding the
initial quarterly transfer to allow for the transfer to occur in 2020.
Revision to the Power Marketing Policy
Southeastern revises the Power Marketing Policy for the Kerr-
Philpott System to include the following additional provisions for RECs
associated with hydroelectric generation.
Kerr-Philpott System: The Kerr-Philpott System Power Marketing
Policy inclusion of procedures to distribute RECs applies only to the
Kerr-Philpott marketing area. At a later date, Southeastern may revise
other marketing policies through a public process.
Renewable Energy Certificates (RECs): The GATS of PJM Environmental
Information Services, Inc. (PJM-EIS) creates and tracks certificates
reporting generation attributes, by generating unit, for each megawatt-
hour (MWh) of energy produced by registered generators. PJM-EIS is a
wholly-owned subsidiary of PJM Connext, L.L.C., itself a subsidiary of
PJM. Both the Kerr and Philpott projects are registered generators
within GATS. The RECs potentially satisfy Renewable Portfolio
Standards, state policies, and other regulatory or voluntary clean
energy standards in a number of states. Southeastern will proceed with
state REC registrations of both the Kerr and Philpott projects.
Southeastern has subscribed to GATS and has an account in which RECs
are collected and tracked for each MWh of energy produced from the Kerr
and Philpott projects. Within GATS, certificates can be transferred to
other GATS subscribers or to a third-party tracking system.
As defined by the PJM-GATS Terms, ``Certificates'' refers to a GATS
electronic record of generation data representing all of the Attributes
from one MWh of electricity generation from a Generating Unit
registered with the GATS tracking system. The GATS will create exactly
one Certificate per MWh of generation. These certificates may be used
by electricity suppliers and other energy market participants to comply
with relevant state policies and regulatory programs and to support
voluntary ``green'' electricity markets.
Southeastern will distribute the GATS-created RECs to Preference
Customers with allocations of power from the Kerr-Philpott System. The
Kerr-Philpott System procedures for distributing renewable energy
certificates will not change the Administrator's prior decisions
regarding the power allocations within the Kerr-Philpott marketing
area.
RECs Distribution: Southeastern shall maintain an account with GATS
and collect RECs from the generation at the Kerr and Philpott projects.
Southeastern will verify the total amount of RECs each month.
Preference Customers with an allocation of power from the Kerr-Philpott
System are eligible to receive RECs by transfer from Southeastern's
GATS account to their GATS account or that of their agent. GATS (or a
successor application) will be the transfer mechanism for all RECs
related to the Kerr-Philpott System. Any further transfer, sale, use,
or trade transaction would be the sole responsibility of a Preference
Customer. Southeastern will summarize RECs by month for calendar year,
quarterly distribution to customers through GATS. Southeastern will
determine a total number of RECs to transfer to each customer based on
the customer's monthly invoices during the same three-month period.
RECs will be project-specific based on the customer's applicable
contractual arrangements. Thus, customers receiving energy from
Philpott will receive equivalent RECs from Philpott, and customers
receiving energy from Kerr will receive equivalent RECs from Kerr.
All RECs distributed by Southeastern shall be transferred within
thirty days of the end of the calendar year quarter (quarterly
distribution month). Each customer should submit to Southeastern, by
the tenth day of a quarterly distribution month, the name, contact
information, and identification number of the GATS account to which the
RECs are to be transferred initially and for any quarterly distribution
month in which the account for transfer changes. The account may be
held by a third party. If the customer fails to designate an account by
the tenth day of the quarterly distribution month, those RECs may not
be distributed until the following quarter. Any RECs that were not
transferred because a transfer account was not provided to Southeastern
may be forfeited if they become non-transferrable in the GATS Terms of
Use procedures, policies, or definitions of Reporting and Trading
Periods, or any subsequent procedures for transfers as established.
The initial quarterly transfer process in GATS will be accomplished
by the thirtieth day after the publication of the final policy
revision. Any balance of RECs that exist in Southeastern's GATS account
after the first quarterly transfer may also be transferred to
Preference Customers according to the customer's invoiced energy at the
time of the REC creation. Southeastern reserves the right to distribute
RECs to a Preference Customer at a later date for RECs declined by
failure to provide a GATS account for distribution and for RECs
currently existing in Southeastern's GATS account as part of the
initial implementation of the revised marketing policy in a manner
consistent with the distribution method in the policy revision.
Effect of Costs on Rates: No rates shall be established by
Southeastern for RECs transferred to Preference Customers. Any cost to
Southeastern, such as the GATS subscription, will be incorporated into
marketing costs and included in recovery through the energy and
capacity rates of the Kerr-Philpott System.
Environmental Impact: Southeastern has reviewed the possible
environmental impacts of the marketing policy revision under
consideration and has concluded that, because the RECs policy would not
significantly affect the quality of the human environment within the
meaning of the National Environmental Policy Act of 1969, as amended,
the proposed action is not a major Federal action for which preparation
of an Environmental Impact Statement is required.
Determination Under Executive Order 12866
Southeastern has an exemption from centralized regulatory review
under Executive Order 12866; accordingly, no clearance of the Federal
Register notice by the Office of Management and Budget is required.
Signing Authority
This document of the Department of Energy was signed on October 8,
2020,
[[Page 66327]]
by Virgil G. Hobbs III, Administrator, Southeastern Power
Administration, pursuant to delegated authority from the Secretary of
Energy. That document, with the original signature and date, is
maintained by DOE. For administrative purposes only, and in compliance
with requirements of the Office of the Federal Register, the
undersigned DOE Federal Register Liaison Officer has been authorized to
sign and submit the document in electronic format for publication, as
an official document of the Department of Energy. This administrative
process in no way alters the legal effect of this document upon
publication in the Federal Register.
Signed in Washington, DC, on October 14, 2020.
Treena V. Garrett,
Federal Register Liaison Officer, U.S. Department of Energy.
[FR Doc. 2020-23113 Filed 10-16-20; 8:45 am]
BILLING CODE 6450-01-P