FERC’s ‘surprise’ PURPA order enrages solar industry

Source: By Arianna Skibell, E&E News reporter • Posted: Monday, October 5, 2020

The Federal Energy Regulatory Commission last month issued an order that reversed 40 years of precedent under the Public Utility Regulatory Policies Act (PURPA) by changing a key threshold for energy production. Now the solar industry is pushing back.

The Solar Energy Industries Association last week demanded that FERC overturn the rule, which the lobbying group says would hamper developers’ ability to sell power to electric utilities.

“This decision reeks of a concerted effort to slam policy through while no one was looking,” Katherine Gensler, vice president of regulatory affairs for SEIA, said in a statement. “FERC launched this surprise on the entire stakeholder community, and the decision threatens to upend the status of hundreds of solar projects already delivering clean electricity to the grid.”

Under PURPA, electric utilities are required to purchase energy from small power producers. In 1981, FERC capped “small” at a capacity of 80 megawatts, even if the facility’s gross electricity generation exceeds that. But on Sept. 1, FERC denied qualifying status to a facility in Montana, called Broadview Solar LLC, because its gross capacity is 160 MW, while its capacity available at any given moment is 80 MW.

“What it does is it changes the way facilities are measured so that a lot of facilities that should be considered qualifying facilities, or would be based on precedent, will all of a sudden not be considered qualifying facilities,” said Dan Whitten, SEIA’s vice president of public affairs. “It seems like another effort to limit the use of PURPA in a way that really kills any competition.”

FERC spokesperson Craig Cano said the commission cannot comment on a pending matter.

Chip Cannon, head of Akin Gump Strauss Hauer & Feld LLP’s energy regulation practice, said FERC’s decision to reverse precedent was surprising.

“The fact that it came out of the blue and is overturning what has been standard policy for 40 years is pretty striking,” he said. “It seems like they went out of their way to take a swipe at the renewables sector.”

In the Broadview case, NorthWestern Energy intervened and argued that because the facility is composed of two separate systems — a solar array and the battery storage — it cannot be considered a single qualifying facility and so exceeds the 80-MW limit under PURPA.

The Edison Electric Institute, a trade group for investor-owned utilities, said the Broadview facility was “artificially” restricting its capacity to maintain its PURPA qualification.

EEI further argued that with the growth of new technologies, it may no longer be appropriate to measure power production capacity based on the net capacity metric established 40 years prior.

SEIA also contested the order on procedural grounds.

“The Commission’s reversal of well-understood and long-accepted precedent … without appropriate notice and comment is arbitrary and capricious and inconsistent with the mandates of the Administrative Procedures Act,” lawyers for the group wrote in a request for rehearing Thursday.

Cannon said while it’s unlikely FERC will grant SEIA’s request, the independent agency will likely provide more clarification on its reasoning.

“And at that point, someone could appeal this to one of the federal circuit courts,” he said.