FERC refuses to act on PURPA complaint against New Mexico commission

The Federal Energy Regulatory Commission issued a Jan. 6 notice that it will not act on a Nov. 4, 2016, petition from Western Water and Power Production Ltd. LLC for enforcement against the New Mexico Public Regulation Commission under the Public Utility Regulatory Policies Act of 1978 (PURPA).

FERC said in the Jan. 6 notice: “Petitioner claims that the New Mexico Commission’s regulations and rulings violate the Commission’s PURPA regulations regarding a qualifying facility’s (QF) ability to sell pursuant to a legally enforceable obligation. Notice is hereby given that the Commission declines to initiate an enforcement action pursuant to section 210(h)(2)(A) of PURPA. Our decision not to initiate an enforcement action means that Petitioner may itself bring an enforcement action against the New Mexico Commission in the appropriate court.”

Western Water and Power (WPP) is trying to develop a 37-MW, biomass-fired plant in New Mexico and to sell power from that facility under PURPA rules. Said its Nov. 7 complaint: “PURPA is dead in New Mexico. So declared the New Mexico Public Regulation Commission (‘PRC’) on August 3, 2016, in the order challenged by this petition. Relying on the Fifth Circuit’s manifestly erroneous decision in Power Resource Grp., Inc., v. Pub. Util. Comm’n of Texas, 422 F.3d 231 (5th Cir. 2005), the New Mexico PRC held that a qualifying facility (‘QF’) has no right to a legally enforceable obligation unless and until it is fully constructed and it is interconnected to the utility’s electrical transmission or distribution system.

“The declaration of the death of section 210 of PURPA by the New Mexico PRC comes at a critical time as [FERC] contemplates the future of section 210 of PURPA and its use in the fight against climate change. The New Mexico ruling vividly illustrates that PURPA is needed now more than ever, both as a weapon to fight climate change and to fight the ongoing resistance of utilities to purchase from QFs. It shows that relying on state agencies to enforce federal law is a fool’s errand. It also shows that despite being on the books for decades, PURPA has been ineffective deploying renewable energy in most jurisdictions because of utilities and state commissions.”

WWP is the owner of a proposed 37-MW biomass plant in Estancia, New Mexico. The facility is a small power production facility within the meaning of Section 210(l) of PURPA, the company said. In September 2011, WWP said it submitted an offer to Public Service Co. of New Mexico (PNM) to sell the entire generation output from its QF. It said the price contained in WWP’s offer was equal to PNM’s full avoided costs over a 20-year term. That case has bounced back and forth between the state and federal commissions since then.

A company contact is: Thomas Melone, President, Allco Renewable Energy Ltd., 14 Wall Street, 20th Floor, New York, NY 10005, Phone: (212) 681-1120, Thomas.Melone@AllcoUS.com.

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.