FERC rejects complaint over California PUC’s limit on qualifying facility contracts

The Federal Energy Regulatory Commission on May 8 rejected a March 9 complaint from Winding Creek Solar LLC against the California Public Utilities Commission under the Public Utility Regulatory Policies Act of 1978 (PURPA).

Winding Creek petitioned the FERC to initiate an enforcement action against the California Commission to remedy part of the California Commission’s feed-in tariff program, called the Renewable Market Adjusting Tariff (Re-MAT), which Winding Creek alleges is inconsistent with PURPA.

“Notice is hereby given that the Commission declines to initiate an enforcement action pursuant to section 210(h)(2)(A) of PURPA,” said the May 8 FERC ruling. “Our decision not to initiate an enforcement action means that Winding Creek may itself bring an enforcement action against the California Commission in the appropriate court.”

Winding Creek alleged that the Re-MAT program, a feed-in tariff program for eligible renewable energy generation sources with a generation capacity of 3 MW or less, violates PURPA by imposing a 750 MW statewide cap on the obligation of utilities under section 292.304(d)(2)(ii) of FERC’s regulations to provide qualifying facilities (QFs) a long-term avoided cost rate. Winding Creek stated that it previously filed a petition for enforcement pursuant to section 210(h) of PURPA in a 2013 case arguing that the Re-MAT program violated PURPA and the Federal Power Act because it fixed the wholesale price for the purchase of power from a QF at a price that has not been determined to be the utility’s full long-term avoided costs, and created a rule that eliminates a QF’s ability to seek a long-term avoided cost pursuant to section 292.304(d)(2)(ii), except through the Re-MAT program.

In that prior Winding Creek case, FERC issued a Notice of Intent Not to Act and did not initiate an enforcement action with respect to the Re-MAT program.

Winding Creek in this latest case argued that more recently FERC had declared that caps, such as caps imposed by the Re-MAT program, are unlawful and violate a QF’s right under PURPA to sell energy and/or capacity at forecasted long-term avoided cost rates. In the event that FERC decides not to initiate an enforcement action, Winding Creek requestd that the federal commission issue a declaratory order stating that the caps imposed by Re-MAT are inconsistent with PURPA and the commission’s regulations.

In California, QFs 20 MW and smaller, including Winding Creek, may sell their net capacity to their host utility under a long-term PURPA contract at an avoided cost rate, containing both an energy and capacity component, pursuant to California’s Standard Contract for QFs 20 MW or Under. The Re-MAT program is a feed-in tariff program that is an alternative to California’s standard PURPA avoided cost rate program.

FERC has held that, as long as a state provides QFs the opportunity to enter into long-term legally enforceable obligations at avoided cost rates, a state may also have alternative programs that QFs and electric utilities may agree to participate in. These alternative programs may limit how many QFs, or the total capacity of QFs, that may participate in the program. FERC said in the May 8 ruling: “The Re-MAT program is such an alternative program.”

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.