Berkshire Hathaway Energy seeks Democratic support for utility proposal 

Source: Hannah Northey, E&E reporter • Posted: Friday, June 5, 2015

Berkshire Hathaway Energy is hoping to win more Democratic support for its bid to ease purchase requirements for utilities under a 1970s law aimed at boosting renewables and efficiency, even if that means tweaking the language.

Jonathan Weisgall, the company’s vice president for legislative and regulatory affairs, made another pitchbefore the House Energy and Power Subcommittee to change the Public Utility Regulatory Policies Act, or PURPA.

Weisgall argued that the law is outdated and the Federal Energy Regulatory Commission’s “overly restrictive” interpretation of the statute has failed to keep up with the times or recognize that small generators once facing steep barriers can now reach emerging markets. He also argued that his firm is not trying to repeal PURPA or hamper the spread of renewable energy but is instead trying to change costly, burdensome and unnecessary requirements for utilities.

BHE has argued that FERC will make the ultimate decision on whether or not to relax PURPA requirements for utilities, and the agency will maintain its ability to reject a company’s request for relief if small generators can show they do not have access to competitive markets.

“Some say PURPA should be repealed outright,” Weisgall told the House subcommittee. “We don’t agree with that approach.”

The company’s four legislative proposals for the House draft — all backed by the Edison Electric Institute — would clarify that generators of 20 megawatts or less, called “qualifying facilities,” can access competitive markets and clarify that small units can reach voluntary, auction-based energy imbalance markets and other sub-hourly markets.

Berkshire Hathaway’s proposal — only a portion of which is currently included in the House draft — would also terminate the mandatory purchase obligation for utilities if small generators are eligible for service under a FERC-approved open-access transmission tariff or if they can participate in competitive resource procurement processes on the state level.

Democrats and a witness representing a solar storage firm expressed concern about the language.

Prompted by Rep. Kathy Castor (D-Fla.), Chris Cook, the president of Solar Grid Storage, said FERC “struck the right balance” when promulgating a rule — Order 688 — under PURPA that assumes small generators under 20 megawatts can’t access wholesale markets. Utilities can currently challenge that assumption, he noted.

Cook said the House language makes the assertion that generators of all sizes are presumed to have access to competitive markets and shouldn’t be given special treatment under PURPA. “I don’t think that’s correct,” he said.

Generators under 20 MW, including residential rooftop solar systems, face “barriers” to reaching big customer hubs, including size restrictions in organized markets, high costs of joining a market, and the need for personnel and sophisticated computer equipment to interact with grid operators, Cook said. He also pointed out that utilities can challenge the rate they must pay for the power.

“Having worked over the past 12 years to develop small solar projects [less than 20 MW] and now small storage projects, my experience has been that the FERC was correct in its ruling that these scale of projects do not have open access to wholesale markets,” Cook said. “I would urge the subcommittee not to upset the balance of FERC Order 688.”

Weisgall’s response: PURPA reforms would not apply to states like Florida, and he’s not aware of any “qualifying facility” that is energy storage. Weisgall also said his company is not trying to stifle renewable energy.

Another witness criticized the language for not going far enough.

Sue Kelly, president and CEO of the American Public Power Association, said she couldn’t support the House draft’s provision on PURPA in its current form, arguing that the language would preclude many public utilities from being able to seek relief from many mandatory purchase obligations. Kelly later clarified that the House language applies only to state- or FERC-regulated entities, but her members are regulated on the local level.

“This could leave [the public power sector] at a competitive disadvantage,” Kelly said. “We are left out.”

Weisgall said during an interview after the hearing that BHE is willing to consider changes to the language to address concerns that have been raised, including ensuring the proposal does not impede energy storage and that rooftop solar doesn’t enter the process by adding a “floor.” BHE may also elaborate its definition of what constitutes a “competitive” process for procuring resources on the state level and could extend the PURPA easements to public power entities, he added.

But Weisgall acknowledged he’s unsure whether those changes will appease Democrats like Rep. Joseph Pallone of New Jersey and Sen. Maria Cantwell of Washington. Cantwell last month blasted BHE’s proposal as a means to game the markets, but Weisgall said her concerns stem from issues involving California, public power, hydro, and the Enron legacy and market manipulation. Weisgall said BHE is interested in a fair and competitive process.

“We’re not here to get rid of PURPA altogether,” he said. “We don’t want to throw it under the bus completely because we don’t have fully competitive markets in all states.”