FERC to address PURPA implementation, at request of Congress


The Federal Energy Regulatory Commission has scheduled a technical conference to address PURPA-implementation issues. 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, sent a letter to FERC on November 6, 2015, 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 energy imbalance markets as comparable markets for purposes of implementing PURPA’s mandatory purchase requirement; (3) the rebuttable 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.

Interestingly, the letter notes that a representative of Berkshire Hathaway Energy testified before Congress that the 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 needed.” Utilities owned by Berkshire Hathaway Energy have sought — and in some cases succeeded — to reduce PURPA contract lengths in several U.S. states, including Idaho, Montana and Oregon and Utah.

The conference will be held June 29, 2016.