Berkshire Hathaway Energy to push for PURPA reform at hearing today 

Source: Hannah Northey, E&E reporter • Posted: Wednesday, June 3, 2015

Berkshire Hathaway Energy today is poised to make another bid on Capitol Hill to scrap federal requirements for utilities to buy power from small solar generators and cogeneration units.

Jonathan Weisgall, Berkshire Hathaway Energy’s vice president for legislative and regulatory affairs, is slated to make the pitch before the House Energy and Commerce Subcommittee on Energy and Power, according to his prepared testimony.

Specifically, Weisgall will call for legislative tweaks that would change the Public Utility Regulatory Policies Act, or PURPA, a 1970s law originally intended to bolster renewables and efficiency. Both the Federal Energy Regulatory Commission and states implement the law.

Weisgall will appear with a number of other witnesses, including an official from FERC and the Energy Department, to comment on a new “accountability” subtitle the House Energy and Commerce Committee unveiled last month to be included in the lower chamber’s larger energy bill.

The House language mirrors an element of a proposal that BHE floated at a Senate hearing recently regarding federal rules for small power production and cogeneration. Specifically, the House draft clarifies that renewable and cogeneration facilities at or below 20 megawatts have access to the markets, thereby eliminating an obligation for utilities in organized markets to buy power from those generators.

But the House draft stopped short of addressing other provisions within BHE’s proposal. And Weisgall is prepared to once again reiterate the need for the lower chamber to go further.

In his prepared remarks, he notes that PacifiCorp, a subsidiary of Berkshire Hathaway Energy, is seeing a sharp increase in the number of “qualifying facilities” even though its long-range energy plan doesn’t find more generation is needed until 2028. Weisgall argues that the utility under the contracts is being forced to buy power above the market price, often to the detriment of ratepayers and reliability.

Weisgall also lays out four legislative changes — all endorsed by the Edison Electric Institute — to modernize PURPA and clarify when utilities must buy power from small renewable and cogeneration units.

Other witnesses will focus on a portion of the House draft that deals with FERC’s investigations.

The House language calls on the agency to more quickly share “exculpatory” information with firms it is investigating and direct regional transmission organizations to develop market rules that prioritize aspects such as “reliability” in rate-making decisions, an apparent response to utility concerns over net metering and distributed generation.

Larry Parkinson, the director of FERC’s Office of Enforcement, said in prepared testimony that the commission is already taking a number of steps outlined in the House language and the bill would actually undermine investigations and burden the agency.

But backing the House language is William Scherman, FERC’s former general counsel and a partner with Gibson, Dunn & Crutcher LLP, who has led criticism of the agency’s enforcement division for handing out excessive fines. FERC Chairman Norman Bay headed the division since 2009 before stepping up to lead the agency.

Scherman has represented a host of companies that have faced investigations or reached settlements with FERC, including a trading division of J.P. Morgan. In prepared testimony, he backed the House draft language, saying the commission needs to be more transparent.

“Unfortunately, the FERC Enforcement process is no longer fair or a reasonable exercise of prosecutorial authority,” he wrote. “It is becoming a common belief among the regulated community and the enforcement bar that entities subject to investigations and enforcement actions do not receive due process either in perception or reality.”

Schedule: The hearing starts Wednesday at 2 p.m. and reconvenes Thursday, June 4, at 10:15 a.m. in 2322 Rayburn.

Witnesses: Kathleen Hogan, DOE deputy assistant secretary for energy efficiency; J. Arnold Quinn, director of FERC’s Office of Energy Policy and Innovation; and Larry Parkinson, director of FERC’s Office of Enforcement. On the second panel, witnesses will include: John Shelk, president and CEO of the American Public Power Association; Christopher Cook, president and general counsel of Solar Grid Storage LLC; Jonathan Weisgall, vice president of legislative and regulatory affairs for Berkshire Hathaway Energy; and William Scherman, a partner at Gibson, Dunn & Crutcher LLP.