Republicans seek FERC review of Carter-era renewables law

Source: Hannah Northey, E&E reporter • Posted: Friday, November 13, 2015

Congressional Republicans called on the Federal Energy Regulatory Commission to explore whether changes are needed to improve a law crafted in the Carter administration to boost renewables and efficiency.

Senate Energy and Natural Resources Chairwoman Lisa Murkowski of Alaska, House Energy and Commerce Chairman Fred Upton of Michigan, and Energy and Commerce Subcommittee on Energy and Power Chairman Ed Whitfield of Kentucky asked FERC to review its use of the Public Utility Regulatory Policies Act of 1978, or PURPA.

The letter to FERC Chairman Norman Bay reflects concerns with the law that Berkshire Hathaway Energy (BHE) raised earlier this year as the Senate and House were crafting comprehensive energy legislation.

PURPA is aimed at bolstering renewables and efficiency by requiring utilities to buy power from “qualifying facilities,” including cogeneration plants that use steam or heat from industrial and commercial processes, as well as solar, wind, biomass, waste and other facilities that are 80 megawatts or less. FERC has overseen the treatment of qualifying facilities for decades.

But the law has long rankled utilities opposed to forced purchase of power.

Jonathan Weisgall, BHE’s vice president for legislative and regulatory affairs, told House members last summer that FERC’s “overly restrictive” interpretation of the statute had failed to keep up with the times or recognize that small generators once facing steep barriers can now reach emerging markets.

BHE’s decisions in the renewable markets are being driven by state clean energy goals, technological advances and U.S. EPA rules — not PURPA, Weisgall said.

Forcing utilities to buy millions of megawatts from smaller units at higher prices that aren’t subject to the same scrutiny is triggering higher prices and reliability issues, he said.

Weisgall also argued his company isn’t trying to repeal PURPA or hamper the spread of renewable energy but is instead trying to change costly, burdensome and unnecessary requirements for utilities, noting that one contract could force PacifiCorp’s customers to incur an incremental $1.1 billion over the next decade for unneeded power (E&E Daily, June 1).

The Republicans’ letter points to Weisgall’s testimony, questioning whether PURPA had become outdated since it was enacted — and then updated under the Energy Policy Act of 2005 — given that the cost of natural gas and renewables has dropped while EPA rules and stiff competition from gas have altered the economics for coal-fired generation.

At the same time, the lawmakers wrote, renewables have flourished under state and federal tax incentives, and distributed energy and microgrids have grown more popular.

“In light of these developments, we encourage the commission to take a comprehensive look at PURPA and its regulations implementing Section 210 through a discussion with interested stakeholders,” they wrote.

But while BHE’s argument gained traction among Republicans, the company’s push to ease utility obligations under PURPA ran into opposition from a key Democratic senator.

The Energy and Natural Resources panel’s top Democrat, Maria Cantwell of Washington, said in June that she was planning to work against BHE’s proposal. Cantwell said the proposed changes amounted to an attempt by the company to bolster its position in the Western coal markets, where it owns both rail lines and generators.

Cantwell also said she’d rather spend her time on issues like battery storage than trying to create a market that needs policing (E&E Daily, June 1).