Boring — but important — PURPA developments


The Federal Energy Regulatory Commission has provided additional information — including a preliminary agenda — regarding the technical conference on PURPA implementation issues it has scheduled on June 29. The full-day conference will focus on two primary issues:  (1) the mandatory purchase obligation under PURPA and (2) the determination of avoided costs for those purchases. Stakeholders interested in speaking at the conference must request to do so online by April 4.

On February 11, FERC received a letter from U.S. Sen. Maria Cantwell, U.S. Rep. Frank Pallone, and U.S. Rep. Bobby Rush in support of the Commission’s consideration of the implementation of Section 210 under PURPA. The letter recommends that FERC consider addressing 11 specific topics at its June 29 workshop on PURPA implementation:  (1) whether methods currently used by states to calculate avoided costs accurately reflect the full value of all avoided costs provided by QFs; (2) whether states have used the discretion already authorized under PURPA to remedy perceived oversupplies of proposed QFs; (3) whether Section 210 appears to be the primary factor driving the development of renewables in some states, as opposed to the complementary state policies; (4) whether independent state policies, including integrated resource planning, competitive procurement requirements, net metering and RPS policies, have generally been stable enough to provide a reliable investment climate for renewables; (5) whether independently-administered, voluntary EIMs have, on their own, ever approached the volume and liquidity of comparable markets; (6) whether there are currently technologies or categories of facilities, such as battery storage, that may be eligible to certify as QFs but are not currently being built or certified as such; (7) whether current interconnection processes and timelines are sufficient or could be improved; (8) whether FERC’s enforcement of Section 210 is effective and consistent with PURPA’s intent; (9) whether FERC is adequately making available to lawmakers and the public data collected from QFs; (10) whether avoided-cost calculations serve a valuable informational function by establishing a competitive benchmark for holding traditionally regulated monopoly utilities accountable for rate proposals; and (11) whether states have been able to successfully integrate PURPA must-purchase requirements as options in competitive resource procurement plans.

On November 6, 2015, FERC received a letter from U.S. Sen. Lisa Murkowski, R-Alaska, chairman of the Senate Energy and Natural Resources Committee, and U.S. Reps. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, and Ed Whitfield, R-Ky., chairman of the House Energy and Power Subcommittee, requesting that it convene a technical conference to examine the implementation of PURPA. The letter recommends that the technical conference consider a range of issues, including:  (1) whether FERC’s “one-mile rule” for determining whether facilities are located at the same site for purposes of determining their status as small power production facilities under PURPA has been abused; (2) the treatment of EIMs as comparable markets for purposes of implementing PURPA’s mandatory purchase requirement; (3) the reubttable presumption that a QF not exceeding 20 MW does not have non-discriminatory market access; (4) whether imposing a mandatory purchase obligation under PURPA is appropriate if a utility is subject to a state-required IRP process and competitive resource procurement processes that allow QFs to compete; and (6) methods used by states to establish avoided-cost rates. Notably, the letter, sent November 6, notes that a Berkshire Hathaway Energy representative testified before Congress that his company is locked into a PURPA “must purchase” contract at rates 43% higher than the market price, forcing customers to pay an incremental $1.1 billion over the next 10 years for electricity that “is not even needed.”