Construction: 8-5

8-5 Should other federal agencies be listed as involved, especially FERC, as FERC is part of the Forward Capacity Market/Auction which seems to be one of the major driving forces for the construction timeline of this facility? Please explain/clarify.

The Federal Energy Regulatory Commission (“FERC”) is an independent agency that regulates by license the interstate transmission of electricity, the siting of natural gas pipelines and certain types of power generation projects (e.g. Hydro-Electric projects).  However, FERC is not a permitting/licensing agency for the siting and construction of a new natural gas electric generation project such as CREC.  As referenced in the application (pg 115), with FERC Orders 888 and 889 there began substantial de-regulation of the energy markets.

Under the Federal Power Act (“FPA”), CREC will be subject to FERC rate regulation with respect to its wholesale sale of energy, capacity and ancillary services, once it begins making such sales.  Accordingly, prior to CREC going into commercial operation, the Project Company will need to have a rate tariff (e.g., market-based rate tariff) or rate schedule on file with, and accepted by, FERC with respect to the Project Company’s sale of energy, capacity and ancillary services from the project.  This rate schedule filing would need to be made in the future before the Project Company begins generating test power.  However, unlike gas-pipeline projects (e.g. Spectra’s expansion or hydro-power projects) Invenergy will not need a FERC permit or license for the siting or construction approvals for this natural gas combined cycle energy generation project.

Also, since CREC intends to sell power only at wholesale and own facilities used only for wholesale power sales, it will be considered eligible for exempt wholesale generation (“EWG”) status under the Public Utility Holding Company Act (“PUHCA”) 

Also, with regard to the gas lines to interconnect to Spectra, pursuant to the federal Natural Gas Act, the gas interconnection facilities that CREC plans to construct and own do not require FERC approval because they are not interstate (they do not cross state lines), and they are to be built and owned by the Project Company and used solely to transport natural gas for use by its generation plant.    

Lastly, ISO-New England administers the Forward Capacity Market auctions. ISO-New England is an independent, not-for-profit corporation responsible for ensuring that the region has reliable, competitively priced wholesale electricity today and into the future.  ISO-NE is not a FERC permitting agency for purposes of NEPA.

The other federal agencies that are identified in the application are the Federal Aviation Administration (“FAA”) which will be consulted, as relates to the height of the stacks.