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Apple Files with FERC to Sell Wholesale Power at Market-Based Rates

June 8, 2016 By Cheryl Kaften

Apple, through its wholly owned subsidiary Apple Energy, filed on June 6 (Docket No. ER16-1887) with the Federal Energy Regulatory Commission (FERC) “for market-based rate authority to sell power at wholesale in the Southeast, Southwest, Northwest, Northeast, Central, and Southwest Power Pool regions.”

The company is requesting consent to sell – at market-based rates – energy, capacity, and certain ancillary services, to any purchaser that is not a franchised public utility.

Apple Energy claims it satisfies FERC criteria for market-based rates because: “The Commission permits sales of energy, capacity, and ancillary services at negotiated rates if the seller and its affiliates: (1) lack horizontal market power in the relevant geographic market, i.e., they do not have (or have adequately mitigated) market power in generation; and (2) lack vertical market power in the relevant geographic market, i.e., they do not have (or have adequately mitigated) market power in transmission and cannot erect barriers to entry to competing suppliers through the control of inputs to electric power production.”

Apple’s Full Capacity

Apple Inc. currently owns or controls certain generation facilities, which are qualifying facilities (QFs), within the balancing authority areas operated by Duke Energy Carolinas in the Southeastern United States, and PacifiCorp in the Northwestern United States. Because each of these facilities is a QF that is exempt from the requirements of FPA Sections 205 and 206, Apple Energy has not included these facilities in its current filing.

There are two facilities on the Apple campus in Cupertino, California; as well as one in Nevada, one in Arizona, and one in California from which the company plans to sell uncommitted capacity.

Apple owns – but does not control – Ft. Churchill Solar Array, a solar PV generating facility with a nameplate capacity of 19.9 MW located in Lyon County, Nevada. Sierra Pacific Power (SPPC) d/b/a/ NV Energy controls and operates the Ft. Churchill Solar Array, which is interconnected to the transmission system owned and operated by SPPC in the Nevada Power (NEVP) BAA.

By contrast, Apple owns – and controls – Bonnybrooke PV, a solar PV generating facility with a nameplate capacity of 50 MW located in Pinal County, Arizona. Bonnybrooke PV is currently under construction with commercial operation estimated during the fourth quarter of 2016, and will be interconnected to the transmission system owned and operated by the Salt River Project (SRP) in the SRP BAA.

Apple has entered into a long-term firm power purchase agreement (PPA) for delivery of energy and associated environmental attributes for 130 MW from a solar photovoltaic energy generation facility under construction by California Flats Solar for a 25-year term beginning this October, and located in the BAA and the market administered by the California Independent System Operator (CAL-ISO).

In addition, Apple also owns two behind-the-meter generating facilities in the CAL-SO BAA (Apple Campus 2 – PV and Apple Campus 2 – Fuel Cell) totaling 18.0 MW of capacity.

Apple’s Uncommitted Capacity (for Sale)

In the SRP BAA and first-tier markets, Apple Energy or its affiliates owns or controls interests representing a combined 50 MW and “the applicant conservatively assumes, for purposes of this application, that all such capacity is uncommitted and available for sale, and that all of [the] applicant’s affiliated capacity in first-tier markets is uncommitted and imported into the SRP BAA (148 MW from CAL-ISO). The total amount of uncommitted capacity (198 MW) is substantially less than the net uncommitted supply in the SRP BAA of 2,762 MW.

Apple Energy or its affiliates owns the 19.9 MW Fort Churchill Solar Array operated by Sierra Pacific /NV Energy. Applicant conservatively assumes, for purposes of this application, that all such capacity is uncommitted and available for sale, and that all of Apple’s affiliated capacity in first-tier markets is uncommitted and imported into the NEVP BAA (148 MW from CAL-ISO). The total amount of Apple Energy’s uncommitted capacity (168 MW) is substantially less than the net uncommitted supply in NEVP BAA of 1,187 MW.

In the CAL-ISO BAA and first-tier markets, Apple Energy or its affiliates owns or controls interests representing a combined 148 MW. Solely for purposes of this application, Apple has conservatively assumed that all such capacity is uncommitted and available for sale, and that all of the applicant’s affiliated capacity in first-tier markets is uncommitted and imported into CAISO (20 MW from NEVP and 50 MW from SRP). The total amount of Applicant’s uncommitted capacity (218 MW) is substantially less than the net uncommitted supply in CAL-ISO BAA of 20,297 MW.

Ancillary Services for Sale

The applicant also is seeking authorization to sell certain ancillary services – regulation service, spinning reserve capability, and/or voltage support services – at market-based rates in the organized electricity markets administered by CAL-ISO, the New York Independent System Operator, Inc., (NYISO), Midcontinent Independent System Operator, Inc. (MISO), ISO New England Inc. (ISO-NE), PJM Interconnection (PJM), and the Southwest Power Pool (SPP).

Thus, if the filing is approved, Apple Energy would offer the following in each region:

  • California ISO: Regulation service, spinning reserve service, and non-spinning reserve service;
  • New York ISO: Regulation and frequency response service, and operating reserve service (which include 10-minute non-synchronous, 30-minute operating reserves, 10-minute spinning reserves, and 10-minute non-spinning reserves);
  • Midcontinent ISO: Regulation service and operating reserve service (which includes 10-minute spinning reserve and 10-minute supplemental reserve);
  • New England ISO: Regulation and frequency response service (automatic generator control), operating reserve service (which includes 10-minute spinning reserve, 10-minute non-spinning reserve, and 30-minute operating reserve service);
  • PJM Interconnection: Regulation and frequency response service, energy imbalance service, and operating reserve service (which includes spinning, 10-minute, and 30-minute reserves);
  • Southwest Power Pool: Seller offers regulation service and operating reserve service (which include 10-minute spinning reserve and 10-minute supplemental reserve);p and
  • Third Party Provider. Regulation service, reactive supply and voltage control service, energy and generator imbalance service, operating reserve-spinning, operating reserve-supplemental, and primary frequency response service.

The tariff would be effective on a date set by FERC; however Apple Energy has requested that it be granted within 60 days of the filing.

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