On August 20, 2015, the Idaho Public Utilities Commission (Idaho Commission) issued an order shortening the contract term for certain new and renewing qualifying facilities (QF) to two years. The decision is a major loss for wind and solar QFs, and all projects sized 10 megawatts (MW) and above. Non-wind and solar QFs under 10 MWs will remain eligible for long term contracts at published avoided cost rates. It is likely that the Idaho Commission’s order will significantly reduce the development of new wind and solar in Idaho, which was experiencing record growth.
FERC Sides with Oregon Wind Farm Against PGE
On January 22, 2015, the Federal Energy Regulatory Commission (FERC) issued an order that granted in part and dismissed in part a complaint filed by PáTu Wind Farm (PáTu) against Portland General Electric Company (PGE). FERC agreed with PaTu’s essential complaint that PGE may not refuse to accept PáTu’s net electric energy output that is delivered to PGE’s system. FERC also: 1) dismissed PáTu’s arguments that PGE violated FERC’s standards of conduct; and 2) concluded that PáTu should seek monetary reparations in court or before the Oregon Public Utility Commission (Oregon Commission) rather than FERC itself.
New Oregon Avoided Cost Rates and Contracts
The Oregon Public Utility Commission (Oregon Commission) has approved new standard contracts and rates for qualifying facilities (QFs) that sell their power to Portland General Electric Company (PGE), PacifiCorp, and Idaho Power Company (Idaho Power). These new rates and contracts are only available to QFs that have the right to sell power to utilities under the Oregon and federal Public Utility Regulatory Policies Act (PURPA) and that have a maximum output of 10 megawatts (MW) or lower. PGE’s new contracts and rates were approved on December 16, 2014, while PacifiCorp’s and Idaho Power’s were allowed to go into effect in August 2014. PGE’s and PacifiCorp’s avoided cost rates and contracts provide new options for eligible renewable energy QFs to sell their electricity to these utilities.
New Idaho Power Solar Contracts
Idaho Power Company (Idaho Power) has entered into contracts to purchase over 450 megawatts (MW) of solar capacity in Oregon and Idaho. The solar projects, if developed, would significantly increase Idaho Power’s supply of green power and make Idaho Power a regional leader in the acquisition of solar energy.
Fifth Circuit Limits PURPA Wind Sales
On September 8, 2014, the federal Fifth Circuit Court of Appeals issued an opinion that may make it more difficult for certain qualifying facilities (QFs) to sell power to electric utilities. The two-judge majority concluded that wind generation facilities owned by Exelon could not sell power pursuant to a “legally enforceable obligation” to Southwestern Public Service Corp. A legally enforceable obligation essentially means that the utility has a legal obligation to purchase power from the QF. The third judge issued a strongly worded dissent disagreeing with the majority’s holding and reasoning.
FERC Requires Utilities to Pay QFs for Capacity
On March 20, 2014, the Federal Energy Regulatory Commission (FERC) issued a declaratory order concluding that utilities must pay qualifying facilities (QF) for capacity as well as energy in sales pursuant to a legally enforceable obligation. A legally enforceable obligation is when a QF has the right to sell power to a utility at specific prices. FERC found that the Montana Public Service Commission’s (Montana Commission) rule requiring QFs to participate in a competitive bidding process to be paid for capacity failed to adequately compensate QFs. As it typically does, FERC declined to initiate an enforcement action against the Montana Commission, but the declaratory order allows a number of QFs to sue the commission in court.
Oregon Commission Reaffirms Many of Its PURPA Policies
On February 24, 2014, the Oregon Public Utility Commission (Oregon Commission) issued an order in the first part of its investigation into its policies related to contracting and pricing under the Oregon and federal Public Utility Regulatory Policies Act (PURPA). The Oregon Commission maintained most of its existing policies; however, it made a number of modifications that could impact the development of small power production facilities. The order completes the first phase of its comprehensive investigation, and the Commission will consider a number of other critical PURPA-related issues in a second phase in 2015.
FERC Rejects Proposal to Eliminate Small QF PURPA Purchase Obligation
On October 17, 2013, the Federal Energy Regulatory Commission (FERC) denied PPL Electric Utilities Corporation’s (PPL Electric) request to terminate its mandatory purchase obligation for a qualifying facility (QF) under 20 megawatts (MW).
Hydropower Act May Spur Small Project Development
President Obama signed the Hydropower Regulatory Efficiency Act of 2013 on August 9, 2013. Congress passed the law to encourage hydroelectric development by streamlining the process for developing and operating small hydro projects that are subject to regulation by the Federal Energy Regulatory Commission (FERC).