UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION ) ) ) ) ) MOTION TO INTERVENE AND PROTEST OF ACCIONA WIND ENERGY USA LLC

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1 UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Southwest Power Pool, Inc. ) ) ) ) ) Docket No. ER MOTION TO INTERVENE AND PROTEST OF ACCIONA WIND ENERGY USA LLC In accordance with Rules 211, 212, and 214 of the Rules of Practice and Procedure of the Federal Energy Regulatory Commission ( FERC or the Commission ), 1 Acciona Wind Energy USA LLC ( Acciona ) hereby files this Motion to Intervene and Protest ( Protest ), in response to the filing by Southwest Power Pool, Inc. ( SPP ) submitted on December 20, 2013 seeking to amend Attachment V of its Open Access Transmission Tariff ( SPP Tariff ) to revise interconnection procedures applicable to new interconnection requests, to projects with effective interconnection agreements that are not meeting project milestones and to projects in commercial operation that are operating at an interconnection level below the total capacity of their interconnection agreement. 2 SPP has requested an effective date of March 1, C.F.R , 212 and 214. Southwest Power Pool, Inc., Revisions to Modify the Generator interconnection Procedures, Docket No. ER (December 20, 2013) ( SPP Filing ) (terms capitalized here in reflect the SPP Filing and the SPP Tariff and if not otherwise defined here are defined in those documents). 1

2 As described in more detail below, Acciona s Protest seeks modifications to SPP s proposal, as SPP s proposed amendments are unjust and unreasonable to the extent they modify the procedures applicable to existing projects that have Generator Interconnection Agreements ( GIAs ) in effect that are far along in the interconnection process or even in commercial operation, including projects with GIAs where the generator has exercised contractual suspension rights. The SPP Filing has not demonstrated a compelling need to subvert generators contractual rights by applying the new procedures to existing projects. Indeed, the SPP Filing demonstrates that the previous round of SPP queue reform, approved by the Commission in has had great success in ameliorating the challenges that the current round of amendments is intended to address. 4 As 2009 SPP Queue Reform has significantly improved queue management in SPP and therefore reduced the urgency for further reform, the determination by FERC in the 2009 SPP Queue Reform that existing GIAs should continue to operate under the procedures in place prior to the 2009 reform is even more appropriate. SPP simply has not satisfied the heavy burden associated with impacting the contractual rights of generators under fully effective and executed GIAs. Therefore, Acciona requests that FERC direct SPP to revise the proposed amendments in the following ways: A. Provide projects in compliance with the terms of their interconnection agreements with respect to suspension not be penalized for failing to meet Appendix B milestones by losing queue priority and being subject to new 3 4 Southwest Power Pool, Inc., 123 FERC 61,114 (2009) ( 2009 SPP Queue Reform ). SPP Filing at p. 4-5 (describing the greatly improved Interconnection Request processing that has reduced study periods and facilitated a three-fold increase in wind generation on the SPP system)

3 financial security requirements not included in the interconnection procedures under which their interconnection agreements were negotiated; and B. Remove new provisions described in the SPP Filing that require interconnection customers to execute revised interconnection agreements for projects in commercial operation operating below the total size approved in their effective interconnection agreements or clarify that such provisions only apply to new interconnection requests. In support of this Protest, Acciona states the following: I. COMMUNICATIONS All communications concerning this Protest and any other aspect of this proceeding should be addressed to the following persons and the same persons should be included in the official service list maintained by the Secretary for this proceeding. John Taylor* General Counsel and Vice President Acciona Energy North America Corporation 333 W. Wacker Dr., Suite 1500 Chicago, Illinois Phone: (312) Franklin Bristol* Director, Transmission Acciona Wind Energy USA, LLC 333 W. Wacker Dr., Suite 1500 Chicago, Illinois Phone: (312) William DeGrandis* Stephen Snyder* Paul Hastings LLP th Street, N.W. Washington, D.C Telephone: (202) * Indicates persons to be designated for service under the Commission s rules. Acciona requests waiver of any applicable limitations in Rule 203(b), to permit service to these designated persons. II. BACKGROUND On December 20, 2013, SPP submitted the SPP Filing, which includes proposed revisions to its Attachment V Generator Interconnection Procedures ( GIP ) and form - 3 -

4 GIA. SPP asserts these amendments build on earlier GIP revisions intended to reduce interconnection queue backlogs and limit the time and money associated with restudies. SPP noted that previous revisions to its GIPs intended to address these issues had been on the whole successful, but that it still perceived a need for the additional changes that are included in the SPP Filing. These revisions include increased security deposits which SPP claims are needed to discourage speculative projects and a change to how queue priority will be determined among interconnection requests. The SPP Filing intends to build upon those earlier efforts and further adapts the queue process in the GIP in Attachment V of the Tariff in order to account for current and anticipated issues in the SPP footprint. 5 In the SPP Filing, SPP proposes to apply the new GIPs to as many Interconnection Requests as possible. 6 To that end, SPP included revisions that would apply the new GIPs to interconnection requests that do not have GIAs with effective dates as of the effective date of FERC s potential approval of the SPP Filing ( effective GIAs ), as well as to effective GIAs that are not meeting milestones listed in Appendix B of the GIA, even if such GIAs are not in breach as a result of the generator exercising its suspension rights. Regarding this latter category, SPP departed from its direction in the previous round of queue reform, in which it successfully sought Commission approval to exempt all effective GIAs. 7 SPP requested that the new GIPs go into effect on March 1, 2014, with a subsequent transition period of 60 days for customers without executed SPP Filing at p. 6 Id. at pp See 2009 SPP Queue Reform at

5 GIAs to transition to the new GIPs. SPP also included provisions that it would submit to FERC revised GIAs to conform to the new GIPs for customers with effective GIAs that were not meeting Appendix B milestones. III. MOTION TO INTEVENE Acciona is a Delaware Limited Liability Company engaged directly and through its subsidiaries in the business of developing and owning renewable energy resources throughout the United States, including in SPP. Acciona is wholly owned by Acciona Energy North America Corporation ( Acciona Energy NA ), a corporation organized and existing under the laws of the state of Delaware, with its principal place of business in Chicago, Illinois. In SPP, Acciona has the following projects in operation or development: Wind Farm Bear Creek, LLC ( Bear Creek ), a 135 MW wind project in Hamilton County Kansas with an effective GIA; Dempsey Ridge Wind Farm, LLC ( Dempsey Ridge I ), a 132 MW wind farm in Roger Mills County, Oklahoma with an effective GIA and currently in commercial operation with a follow-on phase for an additional 92 MW; Red Hills Wind Project, L.L.C., a 123 MW project near Elk City, Oklahoma with an effective GIA and currently in commercial operation; WindFarm 66, LLC, a 150 MW wind farm located near Arapaho, Oklahoma with an effective GIA and; and Solomon Forks Wind Farm, LLC, a 108 MW wind project in Thomas County and Northwestern, Kansas with an effective GIA. Acciona also has an interest in the MW Blue Canyon Wind Park located in Caddo and Comanche Counties, Oklahoma. Dempsey Ridge I has an effective GIA for up to 224 MW, 132 MW of which is in Commercial Operation. No further upgrades are required to bring the additional MW on-line. The existing 132 MW in operation has experienced substantial curtailments and the project is waiting for - 5 -

6 implementation of key SPP upgrades identified with SPP s Transmission Expansion Plan ( STEP ) to determine the financial viability of constructing the remaining MW. Thus, as a developer and/or an owner of over 700 MW of renewable energy projects located in SPP, Acciona has made, and is making, significant investments in SPP. As an interconnection customer and transmission customer of SPP and a renewable developer in the SPP region, Acciona will be directly affected by, and have a significant interest in, the SPP Filing. 8 Acciona s interests cannot be adequately represented by any other party. Accordingly, Acciona requests leave to intervene in this proceeding with full rights accorded party status. IV. PROTEST The SPP Filing is unjust and unreasonable in its application to projects with GIAs with an Effective Date prior to the requested effective date of the SPP Filing. The Commission has traditionally been reluctant to apply such GIA revisions to existing projects with executed GIAs. 9 This reflects how critical the ability to rely on executed agreements is for generators seeking funding and developing viable projects. This also supports the Commission s more general strong policy preference, reiterated as recently as the day before the submittal of this Protest, in supporting the sanctity of contracts, C.F.R (b)(2)(ii)(B). See 2009 SPP Queue Reform at 98 (finding a queue reform that excluded existing interconnection requests with agreements already filed with the Commission from the application of the new procedures as just and reasonable); see also California Independent System Operator Corporation, 132 FERC 61,196 at 24 (2010)( 2010 CAISO Tariff Revisions )(approving tariff revisions to the GIA process that exempted interconnection customers with executed GIAs; compare Midwest ISO Independent Transmission System Operator, Inc., 138 FERC 61,233 at (2012); order of reh ing, 139 FERC 61,253 (2012) ( 2012 MISO Queue Reform )(allowing reforms to GIPs to apply to some customers with effective GIAs on finding that failure to do so would defeat the goals of queue reform and that considerations of protecting the reasonable expectations of interconnection customers therefore satisfied)

7 even where revision is permissible. 10 The SPP Filing describes continuing issues SPP desires to address in its queue process, but these issues do not come close to the level FERC has required in the past to apply new procedures to existing projects with GIAs. Thus, similarly to the determination the Commission made in the 2009 SPP Queue Reform, the Commission should direct SPP to submit revised GIPs that clearly exempt existing projects with effective GIAs from the revised procedures. A. Projects with Effective Interconnection Agreements Must be Able to Rely on Suspension Provisions Existing at the Time the Agreements were Reached. SPP proposes to apply revised queue and security deposit provisions to new interconnection requests. However, SPP also seeks to go well beyond new projects by applying the new GIPs to existing projects with effective GIAs that are not meeting their Appendix B milestones. 11 Some generators with GIAs have exercised their contractual rights to suspend work on their project. It is due to operation of the suspension rights that they are not meeting their Appendix B milestones, but they are not in breach. The effect of SPP s proposed revisions is to effectively read the Section 5.16 suspension provisions out of existing GIAs. SPP has provided no compelling technical, operational or financial data or information justifying such a gutting of existing contractual rights. Post 2009 SPP Queue 10 See e.g., Rail Splitter Wind Farm, LLC v. Ameren Services Company, Midwest Indep. Transmission System Operator, Inc., 142 FERC 61,047 at 31 (2013), order on reh g, 146 FERC 61,017 (2014); citing FERC Order No. 888 and Midwest Indep. Transmission Sys. Operator, Inc., 117 FERC 61,128 at 26 (2006)( Even a contract that can be revised under the just and reasonable standard (as opposed to the more stringent public interest standard) is not to be lightly revised. This is the case because a degree of stability and predictability is crucial to the functioning of businesses and markets and to attracting investment in the utility business. ). 11 SPP Filing at 13; revised GIPs at Section

8 Reform GIAs include provisions allowing interconnection customers to suspend for 18 months. This replaced GIPs, still present in some grandfathered GIAs, which allowed suspension for up to three years. SPP s reduction in permitted duration of suspension, along with other changes in the 2009 SPP Queue Reform, significantly improved the perceived problem of projects in suspension. According to the SPP Filing, prior to the 2009 SPP Queue Reform, 17 GIAs were on suspension, representing 3,544 MW. As of the date of the SPP Filing, however, that had been reduced to 9 projects on suspension totally 846 MW. 12 This demonstrates that the challenges that may have been caused by suspensions have been substantially mitigated by the previous reforms. While the Commission has allowed the revision of existing procedures to be applied to interconnection customers with executed GIAs in certain limited circumstances discussed below, 13 it has more consistently been reluctant to apply new procedures retroactively. 14 The 2012 MISO Queue Reform is particularly relevant in that the Commission allowed MISO to apply revisions to its GIP even in some cases where a customer had an effective GIA. However, the Commission reiterated that reforms that affect interconnection requests in the later stages of the interconnection process create special circumstances that require careful considerations because such reforms can significantly disrupt the activities of customers who may have relied upon the existing process. 15 The Commission was willing to take this step only after considering the MISO s substantial Id. at p. 5. See 2012 MISO Queue Reform at 106. See e.g., 2009 SPP Queue Reform at 98. See 2012 MISO Queue Reform at

9 evidence indicating that there is a backlog in its queue and that failing to apply revisions to late-stage interconnection requests would not address the problems identified by MISO. 16 This limited set of circumstances, where it may be necessary to apply reforms to late-stage interconnection requests to resolve current backlogs 17 is not present with respect to applying the reforms in the SPP Filing to projects with effective GIAs that have failed to meet milestones due to suspension. The SPP Filing provides ample evidence that the last round of revisions has significantly improved the state of the SPP Queue. On the specific issue of GIAs in suspension, SPP stated that the total MW represented by projects in suspension has fallen to less a quarter of the amount prior to the 2009 SPP Queue Reform. 18 Given this improvement, SPP has not demonstrated that effectuating its desired reforms requires upsetting the procedures applicable to projects with effective GIAs, and the circumstances are more akin to situations in which FERC has approved queue reform that does not apply to projects with effective GIAs. 19 Most directly, as SPP has made great strides since the 2009 SPP Queue Reform without the application of that reform to effective GIAs, it is not just and reasonable to determine that such an imposition is justified now. Further, the interest of projects with effective GIAs being able to rely on their GIAs and the GIPs in place on execution is even more compelling than it was prior to the Id. Id. SPP Filing at p. 5. See 2009 SPP Queue Reform at (); 2010 CAISO Queue Reform at ()

10 2009 reforms. Just within the last several years, SPP significantly tightened suspension provisions, increasing security requirements and reducing permissible time a project could suspend from three years to 18 months. Barring a compelling justification, projects with effective GIAs should be able to rely on the procedures in place when the GIAs went into effect. Acciona has several projects in SPP with effective GIAs under which it has exercised its contractual suspension rights. Acciona s reliance on its existing contractual rights will be undercut substantially if SPP s proposed revisions are accepted. Solomon Forks and Bear Creek were grandfathered under the prior queue reform and are in suspension, and SPP has given no compelling reason not to continue this status. WindFarm 66 was part of the queue transition cluster and met all its obligations including the new suspension rules resulting from the last reform, including the shortened period for a valid suspension. WindFarm 66 should therefore be able to rely on the revisions SPP made to its GIPs just a handful of years ago and be grandfathered under any reforms approved in connection with the SPP Filing. None of these projects should be exposed to new procedures, new studies or new upgrade requirements. Absent the limited circumstances described above in which the Commission has allowed new GIPs to apply to existing GIAs, the Commission has allowed restudies and revision of existing obligations of interconnection customers in order to correct mistakes made in the prior study process. 20 However, that kind of mistake has not been made in this case, and SPP 20 See Midwest Indep. Transmission Sys. Operator, Inc., 135 FERC 61,222 (2011); order on reh g, 143 FERC 61,050 at (2013) (finding that restudies performed to correct mistakes in an earlier study may alter the in-service date or cost responsibility of a project without violating Commission (continued...)

11 is denying projects with effective GIAs the suspension rights included therein, or at the least making the exercise of suspension rights so onerous as to effectively deny these rights. Because information regarding the GIP revisions included in the SPP Filing was not available at the time these effective GIAs were executed (in contrast to situations in which mistakes were made in studies, but the correct information was available at the time of the study), FERC should not allow SPP to amend their GIPs in a way that could potentially lead to restudies, delays and additional cost responsibility borne by projects with effective GIAs. 21 SPP s proposed tariff revisions should therefore be revised to allow interconnection customers the benefit of suspension provisions included in their validly executed GIAs. To give effect to this limitation, FERC should direct SPP to revise its proposed revisions to its GIP as shown below: (...continued) Any Interconnection Request for which a GIA has been executed or has been filed unexecuted with FERC as of the Revision Date shall not be subject to this GIP unless the Interconnection Customer is not meeting the milestones listed in Appendix B of its GIA, after delaying the milestones in Appendix B to take into account the duration of any valid suspension requested by the Interconnection Customer pursuant to the terms of the GIA. An Interconnection Customer not meeting its milestones, as adjusted to account for the duration of a valid suspension shall be required to conform to Section 8.2 and 8.9 of this GIP. If an Interconnection Customer is not meeting the milestones in Appendix B of its GIA, as adjusted to account for the duration of a valid suspension, the Transmission precedent prohibiting changes in upgrade cost responsibility arising from changes in system configuration occurring after its system impact study is completed). 21 See Neptune Regional Transmission System, LLC v. PJM Interconnection, L.L.C., 110 FERC 61,098 at 23 (2005), order on reh g, 111 FERC 61,455 (2005), aff d sub nom., Public Serv. Elec. & Gas v. FERC, 485 F.3d 1164 (D.C. Cir. 2007)( If an interconnection customer were to be held financially responsible for the costs of events occurring after its System Impact Study is completed it would be impossible for the customer to make reasoned business decisions. )

12 Provider shall revise the GIA to conform to this GIP and shall file such revised GIA at FERC. This revision effectuates the desires of SPP to move forward appropriately with additional queue reform without undue interference with existing arrangements. As discussed above, the incremental plausible improvement to the SPP queue associated with roping in the remaining projects with effective GIAs with projects in suspension according to the terms of those GIAs does not justify the extraordinary step of retroactively undermining the suspension provisions approved for existing GIAs. B. Projects in Commercial Operation Should not be Required to Enter a Revised Interconnection Agreement Clawing Back a Portion of Interconnection Service that they have been Allocated and Potentially Paid for by way of Network Upgrades. The SPP Filing also proposes revisions that would apply the reforms to projects in commercial operation that have not built generation up to the total size approved in their GIA. This clearly applies to new GIAs, which will include a performance obligation to build up to the full size. 22 But the revisions to the GIPs also could be interpreted to apply to existing projects with GIAs in effect in commercial operation that were approved for a level of interconnection above their current level of generation. FERC should direct SPP to clarify that existing projects in commercial operation will not be subject to transition to the new GIPs, and that these concerns are addressed only prospectively for new interconnection requests. This is particularly appropriate because the requirements affecting the level of interconnection are included primarily in revisions to SPP s GIA. While the Commission 22 See Revised GIA at Sections 2.3.2,

13 has determined that altering procedures under which an interconnection moves forward does not constitute retroactive ratemaking, 23 forcing an existing project into the situation of accepting a revised GIA would move much closer into requiring the modification of existing bilateral contracts. 24 The effective GIAs that have reached commercial operation, even for a portion of their interconnection level, were studied up to the interconnection amount included in their GIAs and funded network upgrades for this amount. While FERC may determine that the GIA revisions affecting interconnection levels are just and reasonable for newly negotiated and executed GIAs, it should clarify that the SPP revisions do not apply to existing effective GIAs in commercial operation. 25 If FERC does revisit this issue for existing GIAs, it should at the least require that reduction of the interconnection level of an existing GIA may not be effective prior to three years from the effective date of FERC s approval of the SPP Filing, as opposed the three years from the Commercial Operation Date included in an existing GIA. 23 See 2012 MISO Queue Reform at 107 (distinguishing requirements that interconnection customers comply with GIPs prospectively from retroactive changes to a GIA). 24 In the SPP Filing, SPP describes a perceived problem with projects with effective GIAs building only a portion of the generation approved under their GIA. Due to SPP s framing of the problem with current projects, but providing a solution under revisions to the GIA as opposed to the GIP, it is not clear if SPP contends that existing projects that are in operation only for a portion of their approved interconnection amount are missing milestones for the purposes of Section of the revised GIP on Transition and thus subject to all of the new GIPs. Such a reading could then lead to the conclusion that these projects had not gone into commercial operation for more than three years, and therefore are subject to a Material Modification under Section of the revised GIPs, potentially requiring a revised GIA to be executed. 25 See Midwest Indep. Transmission Sys. Operator, Inc., 137 FERC 61,188 at 29 (2011); order on reh g, 139 FERC 61,197 (approving the inclusion of a new provision in GIAs allowing termination of new GIAs that have not achieved commercial operation within three years, or termination of the portion of interconnection service that had not gone into commercial operation for projects that had achieved partial commercial operation). Applying this provision to new GIAs, as opposed to existing, also was supported by the fact that for new GIAs, suspension provisions had been reduced below three years. Id. at 24 (MISO explaining that the new suspension provisions no longer allowed three years of suspension as a matter of right)

14 Specifically with respect to Acciona, Dempsey Ridge I achieved commercial operation of 132 MW and delayed the remaining 92 MW, in part, because of SPP curtailments giving rise to concerns that SPP may have oversubscribed ERIS in the area. Dempsey Ridge I has funded all Network Upgrades identified as required to support the full 224 MW, and the GIA should not be considered in breach because SPP s system is not providing the ERIS that the interconnection studies indicated was available. The remaining phase of Dempsey should be permitted to wait for key SPP upgrades already identified in the STEP before making a final determination about the financial viability of the remaining phase. The Commission has previously determined that extensions to the Commercial Operation Date due to delays not attributable to the interconnection customer should be liberally granted. 26 The relief requested here of clarifying that projects in commercial operation for a portion of the total level of interconnection service granted in their GIAs that have completed all network upgrades identified in their GIAs are not subject to the new GIPs in the SPP Filing will not frustrate the purposes of the SPP reforms, while protecting the rights of customers to existing contracts. The existing Dempsey Ridge I phase already paid for all the Network Upgrades necessary for the entire interconnection amount, and Dempsey s final phase should not be exposed to new studies or upgrades in GIPs other than those in place when its GIA was executed MISO Queue Reform at 225. The Commission determined that changes to in-service and commercial operation dates should not be unreasonably withheld if projects faced delays based on circumstances outside of their control, including changes in milestones by other parties or delays by higherqueued projects. Delays in SPP upgrades identified in the STEP have similarly delayed the final phase of Dempsey

15 V. CONCLUSION For the reasons discussed above, Acciona requests that the Commission grant its Motion to Intervene and Protest. Respectfully submitted, /s/ William D. DeGrandis William D. DeGrandis Stephen J. Snyder Paul Hastings LLP th Street, N.W. Washington, D.C Telephone: (202) Attorneys for Acciona January 17,

16 CERTIFICATE OF SERVICE Pursuant to Rule 2010 of the Commission s Rule of Practice and Procedure, I hereby certify that I have this day served a copy of the foregoing Motion to Intervene and Protest, of Acciona Wind Energy USA LLC on all persons designated on the official service list compiled by the Secretary in this proceeding. Dated at Washington, D.C., this 17th day of January, /s/ Stephen Snyder Stephen Snyder

17 Document Content(s) Motion to Intervene and Protest of Acciona ER PDF