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Utility Dive: Is FERC Overstepping its Authority and Hurting Renewables? States, Power Groups Question PURPA Plan

Posted by Catherine Morehouse on Dec 5, 2019

Utility Dive covered state AG's and competitive market groups who criticized a recent federal proposal to overhaul PURPA, including quotes by AEE's Jeff Dennis. Read excerpts below and the entire UD piece here. 

States, competitive market groups and other stakeholders criticized a federal proposal to overhaul the Public Utilities Regulatory Policies Act (PURPA), in comments filed Tuesday, questioning the potential impacts those changes could have to the country's renewable energy momentum. Stakeholders, including the Federal Trade Commission (FTC) and Electric Power Supply Association (EPSA) raised concerns that the notice of proposed rulemaking (NOPR) issued by the Federal Energy Regulatory Commission in September would unduly impact states outside regulated power pools. Meanwhile, states participating in regional transmission organizations (RTOs) and independent system operators (ISOs) had their own concerns about the potential impacts of the proposed rule.

Eight attorneys general joined by two state regulators stretching across diverse markets and utility service models submitted comments laying out their concerns that FERC would be overstepping its authority in making these changes, something legal and renewables groups had argued as well. The states also raised concerns that the rules could harm renewables deployment in their states and others. Overhauling PURPA has been a longstanding goal of FERC Chair Neil Chatterjee, who says the proposed rules are intended to give states more flexibility in implementing the 1978 federal law and more accurately reflect the realities of a low-cost renewables market.

Dozens of utilities filed comments in support of the proposed changes, including Duke Energy, Pacific Gas & Electric, Consumers Energy and Xcel Energy. Those companies largely supported the comments of their trade association, the Edison Electric Institute (EEI), which argued that utility customers are obligated to pay "significantly more" for power under PURPA than they would have to otherwise. Top concerns raised by advocates and states were the uncertainty that a live market price for renewables as opposed to a fixed price under PURPA would bring to facilities, the potentially crippling effects of the reduced MW threshold facilities need to hit in order to qualify for funding and the idea that FERC did not sufficiently vet the idea of truly competitive pricing for qualifying facilities (QFs) across different regions. Other states said the rules would bring long-awaited relief to regulators...

But even within regulated states, there are concerns about how the changes could impact QFs. Part of FERC's proposal is to lower the megawatt threshold QFs need to meet in order to secure PURPA financing from 20 MW to 1 MW. Stakeholders say this new threshold ignores the difficulties small facilities have in competing in regulated markets. "Smaller QFs, 20 MW and under, still don't have open access to those markets," Advanced Energy Economy Managing Director and General Counsel Jeff Dennis told Utility Dive. "There's a lot of barriers to their ability to participate. So that was one place where we said competition is still not complete in that area and PURPA still has a role..."

Read the full UD piece here. 

Topics: AEE In The News