FERC rejects arguments of Vermont solar developer on QF issues

The Federal Energy Regulatory Commission on March 20 refused to grant reconsideration of a June 2013 decision on its part rejecting arguments of Otter Creek Solar LLC about power project regulation in Vermont.

FERC in June 2013 had issued a notice of intent not to act in this matter. In that June 27 order, FERC declined to initiate an enforcement action under section 210(h)(2)(A) of the Public Utility Regulatory Policies Act of 1978 (PURPA) against the Vermont Public Service Board.

Otter Creek had argued that the avoided cost rate pricing determination and mechanism in the Vermont board’s feed-in tariff program, referred to as the Sustainably Priced Energy Enterprise Development (SPEED) program, violates PURPA because, among other things, it fixes the wholesale price for the purchase of power from a qualifying facility (QF) at a price that has not been determined to be the utility’s avoided costs.

In the June 27 order, the federal commission noted that QF participation in the SPEED program is optional, and that QFs may still choose to participate in the Vermont board’s longstanding Rule 4.100-Small Power Production and Cogeneration (Rule 4.100) program, which has been found by FERC to be consistent with PURPA.

In its now rejected request for reconsideration, Otter Creek made two arguments.

  • First, although Otter Creek is not an electric utility but rather is a 2-MW solar farm that has filed a Form 556 self-certification with FERC, Otter Creek argued that the June 27 order “reverses the Commission’s position. . . that a State cannot mandate a price in excess of avoided costs or that have not been determined to be avoided costs.” Otter Creek contended, in this regard, that the June 27 order results in utilities in Vermont being compelled to participate in a program that requires them to pay an above avoided-cost rate.
  • Second, Otter Creek argued that the June 27 order could be read as sanctioning the use of two sets of avoided costs, one under a state preferred program and one under a non-preferred program. Otter Creek maintained that there cannot be two different calculations of avoided costs for facilities of the same type, size and location, such as two 1 MW facilities that sit side-by-side.
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.