Order Addressing Change in Status Filing and Providing Guidance, 71479-71480 [05-23468]

Agencies

• DEPARTMENT OF ENERGY
• Federal Energy Regulatory Commission

[Federal Register Volume 70, Number 228 (Tuesday, November 29, 2005)]
[Notices]
[Pages 71479-71480]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-23468]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission


Order Addressing Change in Status Filing and Providing Guidance

Issued November 17, 2005.
    Before Commissioners: Joseph T. Kelliher, Chairman; Nora Mead 
Brownell, and Suedeen G. Kelly.

------------------------------------------------------------------------
                                                           Docket Nos.
------------------------------------------------------------------------
Calpine Energy Services, LP...........................    ER00-3562-003;
                                                           ER05-817-001;
Calpine PowerAmerica-OR, LLC..........................      ER03-341-002
Calpine PowerAmerica-CA, LLC..........................      ER03-342-002
Power Contract Financing, LLC.........................      ER03-838-003
PCF2, LLC.............................................     ER04-1081-001
Calpine Energy Management, LP.........................     ER04-1080-001
CES Marketing V, LP...................................      ER03-209-002
Calpine Northbrook Energy Marketing, LLC..............       ER03-36-004
MEP Pleasant Hill, LLC................................     ER99-2858-008
Calpine Bethpage 3, LLC...............................       ER05-48-001
Ontelaunee Power Operating Company, LLC...............     ER05-1266-001
CES Marketing VIII, LLC...............................      ER05-818-001
CES Marketing IX, LLC.................................      ER05-819-001
CES Marketing X, LLC..................................      ER05-820-001
Zion Energy, LLC......................................     ER02-1319-004
Calpine Newark, LLC...................................      ER04-831-002
Calpine Parlin, LLC...................................      ER04-832-002
Calpine Construction Finance Company, LP..............     ER00-1115-003
Calpine Philadelphia Energy, Inc......................      ER03-446-002
CPN Bethpage 3rd Turbine, Inc.........................     ER02-1959-003
Bethpage Energy Center 3, LLC.........................     ER04-1099-001
TBG Cogen Partners....................................     ER04-1100-001
Gilroy Energy Center, LLC.............................     ER01-2688-008
Creed Energy Center, LLC..............................     ER02-2227-004
Delta Energy Center, LLC..............................      ER02-600-006
Goose Haven Energy Center, LLC........................     ER02-2229-003
Los Esteros Critical Energy Facility, LLC.............       ER03-24-003
Metcalf Energy Center, LLC............................       ER05-67-001
Pastoria Energy Facility LLC..........................       ER05-68-001
Geysers Power Company, LLC............................     ER99-1983-003
Calpine California Equipment Finance Company, LLC.....      ER03-290-002
------------------------------------------------------------------------

    1. In this order, the Commission accepts a notice of change in 
status filed by Calpine Energy Services, L.P. (CES) and its affiliated 
public utilities (collectively, the Calpine Entities), to report a 
change in status that reflects a departure from the characteristics 
that the Commission relied upon in granting these entities market-based 
rate authority, pursuant to the reporting requirements of Order No. 
652.\1\ For the reasons discussed below, and based on Calpine Entities' 
representations, we accept the Calpine Entities' change in status 
filing.
---------------------------------------------------------------------------

    \1\ Reporting Requirement for Changes in Status for Public 
Utilities with Market-Based Rate Authority, FERC Stats. & Regs., 
Regulations Preambles III ] 31,175 (Feb. 10, 2005) (Order No. 652), 
order on reh'g, 111 FERC ] 61,413 (2005). 18 CFR 35.27(c) (2005).
---------------------------------------------------------------------------

Background

    2. On September 9, 2005, CES and the Calpine Entities filed a 
notice of change in status to report that CES, a power marketer, had 
entered into two Energy Management Agreements regarding certain third 
party-owned electric generating assets as described below. In addition, 
the Calpine Entities state that CES anticipates entering into a third 
such agreement, as also described below. The Calpine Entities state 
that under the Commission's regulations, they are required to report 
any change in status that would reflect a departure from the 
characteristics the Commission relied upon in granting them market-
based rate authority.\2\ The Calpine Entities assert that they are 
providing this notice here out of an abundance of caution based on 
their belief that the Energy Management Agreements described in their 
filing do not constitute a change in status, as contemplated by the 
Commission's regulations. The Calpine Entities claim that CES will not 
acquire control of the facilities at issue under these agreements.\3\
---------------------------------------------------------------------------

    \2\ See, e.g., 18 CFR 35.27(c)(1) (defining a ``change in 
status'' to include, but not be limited to, ``ownership or control 
of generating or transmission facilities or inputs to electric power 
production other than fuel supplies.'').
    \3\ The agreements themselves were not included by the Calpine 
Entities in their submittal.
---------------------------------------------------------------------------

    3. The Calpine Entities state that even assuming CES is deemed to 
acquire control of these facilities, this authority would not alter the 
Commission's prior determinations that CES and its affiliates satisfy 
the Commission's four-part test for market based rate authority.

The IECC Agreement

    4. The Calpine Entities state that on July 29, 2005, CES and Inland 
Empire Energy Center, LLC (IECC) entered into an Energy Management 
Agreement (IECC Agreement), pursuant to which CES will provide certain 
services to IECC, the owner of a 775 MW natural gas-fired electric 
generating facility located in Riverside County, California (IECC 
Facility). The Calpine Entities state that the IECC Facility is 
expected to begin commercial operations in 2008, with the output of the 
facility to be delivered into the transmission system operated by the 
California Independent System Operator, Inc. (CAISO).
    5. The Calpine Entities state that CES will act as IECC's agent to 
market and schedule the energy, capacity, ancillary services, and any 
other product produced by the IECC Facility and arrange for the 
procurement and maintenance of transmission service for the products 
produced by the IECC Facility. CES states it will also arrange for the 
procurement and scheduling of natural gas supplies for use at the IECC 
Facility. The Calpine Entities state that IECC will be the operator of 
the IECC Facility and that CES will act pursuant to orders from IECC. 
CES states it will have limited discretion as to prices for which it 
sells the output of the IECC Facility and purchases products used to 
generate the IECC's Facility's output and deliver this output to third 
parties.

The POA Agreement

    6. The Calpine Entities state that on August 5, 2005, CES and 
Project Orange Associates, L.L.C. (POA) entered into an Energy 
Management Agreement (POA Agreement), pursuant to which CES will 
provide certain services to POA, the owner of an 80 MW natural gas-
fired cogeneration facility located in Syracuse, New York (POA 
Facility). The Calpine Entities state that the output of the POA 
Facility will be sold into the markets operated by the New York 
Independent System Operator (NYISO). CES states that it will act as 
POA's agent and, as directed by POA, bid, schedule, and sell the output 
of the POA Facility in the NYISO market. CES also states it will 
schedule natural gas transportation deliveries and assist in managing 
POA's pipeline imbalances. The Calpine Entities state that CES will 
have limited discretion concerning the prices for which it sells the 
output of the POA Facility and purchases fuel and other products.

[[Page 71480]]

The OPOC Agreement

    7. The Calpine Entities state that CES and Ontelaunee Power 
Operating Company, LLC (OPOC) expect to enter into an Energy Management 
Agreement in September 2005 (OPOC Agreement), pursuant to which CES 
will provide certain services to OPOC, the owner of a 587 MW electric 
generation facility located in Reading, Pennsylvania. The Calpine 
Entities state that the output of the facility will be sold into the 
markets operated by PJM Interconnection, L.L.C. (PJM). CES states that 
it will provide the following services at the direction of, and subject 
to the approval of, OPOC: Power management services (including 
marketing, bidding, and scheduling), fuel management, and risk 
management services. CES states that it will have the authority to 
enter into transactions for the purchase or sale of fuel or power with 
a term of 31 days or less. In addition, the Calpine Entities state that 
the authority for CES to execute other types of transactions could be 
delegated by OPOC from time-to-time by written notice.
    8. Finally, the Calpine Entities include in their submittal tariff 
revisions for those of their affiliates who have not previously filed 
to revise their market-based rate tariffs to include the reporting 
requirement for changes in status, as required by Order No. 652.
    9. Notice of the Calpine Entities' submittal was published in the 
Federal Register,\4\ with interventions or protests due on or before 
October 11, 2005. None was filed.
---------------------------------------------------------------------------

    \4\ 70 FR 57,573 (2005).
---------------------------------------------------------------------------

Discussion

    10. For the reasons discussed below, we will accept the Calpine 
Entities' notice of change in status, as it relates to the POA 
Agreement and the OPOC Agreement. We will not address, at this time, 
the Calpine Entities' representations as they relate to the IECC 
Agreement, given the premature nature of any evaluation concerning 
market conditions in the CAISO market as of the IECC Facility's 
projected 2008 in-service date.
    11. Order No. 652 requires that a seller with market-based rate 
authority notify the Commission of a change in status that would 
reflect a departure from the characteristics relied upon by the 
Commission in granting the seller market-based rate authority. Section 
35.27(c)(1) of the Commission's regulations defines a change in status 
to include but not be limited to ``ownership or control of generation 
or transmission facilities or inputs to electric power production other 
than fuel supplies.''
    12. The Calpine Entities state that under the Energy Management 
Agreements described herein CES will not exercise control over the 
generating facilities at issue (i.e., over the IECC Facility, the POA 
Facility, or the OPOC Facility), as contemplated by Order No. 652.\5\ 
However, we cannot make this determination here based on the record 
before us, in the absence of the agreements at issue and/or a more 
detailed description of the services provided under these agreements 
and their effect on the Calpine Entities' market power analyses.
---------------------------------------------------------------------------

    \5\ ``In short, if an applicant has control over certain 
capacity such that the applicant can affect the ability of the 
capacity to reach the relevant market, then the capacity should be 
attributed to the applicant when performing the generation market 
power screens.'' Order No. 652 at P 47.
---------------------------------------------------------------------------

    13. We clarify, in this regard, that sellers making a change in 
status filing to report an energy management agreement are required to 
make an affirmative statement in their filing as to whether the 
agreement at issue transfers control of any assets and whether the 
agreement results in any material effect on the conditions that the 
Commission relied upon for the grant of their market-based rate 
authority. On some occasions, and at the Commission's discretion, the 
Commission may request the seller to submit a copy of the agreement and 
provide supporting documentation.
    14. We further clarify that a seller making a change in status 
filing is required to state whether it has made a filing pursuant to 
section 203 of the Federal Power Act.\6\ To the extent the seller has 
made a section 203 filing that it submits is being made out of an 
abundance of caution and thus has voluntarily consented to the 
Commission's section 203 jurisdiction, the seller will be required to 
incorporate this same assumption in its market-based rate change in 
status filing (e.g., if the seller assumes that it will control a 
jurisdictional facility in a section 203 filing, it should make that 
same assumption in its market-based rate change in status filing and, 
on that basis, inform the Commission as to whether there is any 
material effect on its market-based rate authority).\7\
---------------------------------------------------------------------------

    \6\ 16 U.S.C. 824b (2000).
    \7\ Order No. 652 at P 35.
---------------------------------------------------------------------------

    15. The Calpine Entities argue that even assuming that CES will 
control the capacity attributable to its Energy Management Agreements, 
neither CES nor any of its affiliates would possess generation market 
power in the relevant markets (i.e., in the CAISO, PJM, or the NYISO), 
or fail to satisfy the Commission's other requirements applicable to 
their market-based rate authority.\8\
---------------------------------------------------------------------------

    \8\ The Calpine Entities rely, in this regard, on their recently 
submitted triennial review analyses, for each of these three 
markets.
---------------------------------------------------------------------------

    16. We agree that even attributing the capacity associated with the 
POA Facility and the OPOC Facility to the Calpine Entities would not 
alter our recent determinations that the Calpine Entities, in these 
markets (i.e., in the NYISO and PJM), continue to satisfy our 
requirements applicable to the grant of their market-based rate 
authority.\9\ However, as noted above, we cannot decide this issue at 
this time, as it relates to the IECC Facility, which is not scheduled 
to become operational until 2008. A change in status filing regarding 
CES' agreement with regard to the IECC Facility should be made by the 
Calpine Entities no later than 30 days after the IECC Facility becomes 
operational.
---------------------------------------------------------------------------

    \9\ See Creed Energy Center, LLC, Docket No. ER02-2227-003, 
(November 2, 2005) (unpublished letter order). See also CES 
Marketing VI, LLC et al., 111 FERC ] 61,261 (2005).
---------------------------------------------------------------------------

    17. Finally, we will accept for filing the Calpine Entities' 
proposed tariff revisions incorporating the reporting requirement for 
changes in status, as required by Order No. 652.

The Commission Orders

    (A) The Calpine Entities' notice of change in status and proposed 
tariff revisions are hereby accepted for filing, in part, as discussed 
in the body of this order.
    (B) The Secretary is directed to publish a copy of this order in 
the Federal Register.

    By the Commission.
Magalie R. Salas,
Secretary.
[FR Doc. 05-23468 Filed 11-28-05; 8:45 am]
BILLING CODE 6717-01-P