Constellation, Calpine, others urge FERC to reject Exelon co-location tariff proposals
This story was originally published on Utility Dive. To receive daily news and insights, subscribe to our free daily Utility Dive newsletter.
Recommended Reading
Dive Brief:
Constellation Energy, Calpine and Public Service Enterprise Group are among the parties urging the Federal Energy Regulatory Commission to reject proposals from Exelon utilities to change their tariffs to account for data centers and other load co-located at power plants.
“If accepted, the filings would impose sweeping, unsupported policy changes on the PJM [Interconnection] market without adequate stakeholder input,” Calpine said in a filing Wednesday. The company added that the tariff changes would affect not just data centers but also commercial and industrial facilities and potentially residential customers served by public power entities.
However, PJM’s market monitor, Monitoring Analytics, supported the proposals from Baltimore Gas and Electric and other Exelon utilities, saying it would clarify that co-located load cannot avoid FERC or state regulation, or avoid paying transmission and distribution system charges.
Dive Insight:
The issue of how co-located load should be treated became a flash point in PJM after Exelon and American Electric Power challenged an amended interconnection service agreement that would enable Talen Energy to sell power to an Amazon data center from the Susquahanna nuclear power plant in Pennsylvania. FERC is reviewing the agreement.
Exelon subsidiaries BGE and PECO Energy on Friday asked FERC to declare that interconnection of end-use load is a matter of state, not federal, jurisdiction, among other things.
In late August Exelon’s utilities — Atlantic City Electric, BGE, Commonwealth Edison, Delmarva Power & Light, PECO and Potomac Electric Power — filed identical proposed tariff revisions at FERC related to co-located load.
The proposals aim to clarify that load interconnected with their systems must either be designated as “network load” or appropriate point-to-point transmission service must be arranged for the end-use customer, the utilities said.
Co-located loads should pay for their share of the costs of the transmission network as well as other costs that are charged to network users, such as for ancillary services and PJM and FERC administrative charges, the utilities said.
Monitoring Analytics agreed. “Current proposals for co-located load would provide discriminatory treatment for colocated load and would set a precedent for significant changes to the PJM markets that will impose costs on other market participants,” the market monitor said.
Constellation, PSEG, Vistra, the Retail Energy Supply Association, large industrial energy users, and the PJM Power Providers Group and the Electric Power Supply Association are among those opposing the Exelon utilities’ proposals.
“Exelon’s filings are a procedurally improper and blatantly discriminatory attempt to require co-located load within its service territories — specifically, ‘proliferating’ data centers — to become Exelon’s transmission service customers whether such load takes service or not,” said Constellation, an independent power producer. “Exelon’s request should be rejected for what it is: another attempt by a monopoly utility to preserve and increase its market share at the expense of competition and economic development, including the critical and urgent national security need for artificial intelligence and data centers.”
Exelon’s filings were made under the Federal Power Act’s section 205, which cannot be used to change existing PJM rates, according to Constellation.
Even if Exelon was allowed to change its rates through a section 205 filing, the utility company failed to provide evidence showing a rate change was justified, Constellation said.
Further, fully isolated co-located load doesn’t take services from the grid, according to Constellation. “Basic engineering confirms that this load is not relying on the grid,” the company said. “Basic cost causation principles dictate that this load should not pay for services it does not take.”
Voltus, Bloom Energy, Old Dominion Electric Cooperative and Advanced Energy United and the Solar Energy Industries Association raised concerns about the proposals from Exelon’s utilities.
“Before developing responses to the potential effects that co-location may cause, utilities, generator owners, large customers, and grid operators need to come together to examine the full impact of these arrangements,” AEU and SEIA said, noting that FERC is holding a technical conference on Nov. 1 to discuss co-located loads.
“Without understanding all the facts, the Exelon Companies’ proposed revisions could have a chilling effect on co-location agreements,” AEU and SEIA said.