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22 February 2021
Now that Order No. 872 has been effective for a few weeks, the first few proceedings that will inform its implementation have commenced. More such proceedings will certainly be initiated in next few months.
FERC's First Post-Order No. 872 Request for Relief from the PURPA Purchase Mandate
Interestingly, it was two Generation and Transmission cooperatives (ETEC and NTEC) that submitted the first "QM filing" under Order No. 872 and 18 C.F.R. §§ 292.309, .310, seeking relief from having to buy from small power production QFs (SPP QFs) over 5 MW. They filed their joint application prior to the effective date of the Order No. 872, taking some risk that their application could be rejected on this ground. (They had never sought relief from the PURPA must-purchase obligation before, so FERC presumably will process the application as to over 20 MW.) They are seeking relief for their member cooperatives as well. Perhaps the most interesting issue to watch in this case is FERC's response to the adequacy of the discussion of how the G&T cooperatives' distribution-owning members would work with any >5 MW SPP QF to ensure interconnection and wheeling services will be provided. The applicants notes that the Federal Power Act (FPA) would provide redress if access was not forthcoming. Given that the applicants' members are not FERC-jurisdictional and the fact that their members own only distribution systems, the admission that FERC has legal authority under the FPA to provide "redress," i.e., ensure necessary interconnection and wheeling service will be made available, is quite interesting in that the National Rural Electric Cooperative Association was singing a far different tune about the scope of FERC jurisdiction when it appealed Order No. 841. The application contains very little information about the process for distribution-level SPP QFs to obtain interconnection to, and wheeling service over, member distribution systems. That said, FERC may not react to this omission if the application garners no protests in light of the paucity of actual or potential SPP QFs in the relevant service areas.
Opening of Proceeding Relating to the Energy Rate in the California PUC's Recently-Adopted New PURPA Standard Offer Contract
In California, an Assigned Commissioner issued an Amended Scoping Memo and Ruling in Docket 18-07-017 relating to the CPUC's newly-adopted Standard Offer Contract (New QF SOC). The New QF SOC, applicable to QFs 20 MW and smaller, was adopted last year because the prior SOC lacked any option for a fixed energy price. The Scoping Memo has asked for comments on whether changes should be made to the avoided cost pricing options in light of Order No. 872. The Scoping Memo specifically states that there is "good cause to consider whether to require use of variable energy rates determined at time of delivery in New QF SOC s instead of the option of fixed prices determined at the time of contract execution." The CPUC had a variable energy price in its SOC for many years (until it was declared unlawful), such that there is a some likelihood that the CPUC would want to revert back to a non-fixed energy rate, as Order No. 872 permits.
For further information on this topic please contact Jennifer L Key at Steptoe & Johnson LLP by telephone (+1 202 429 3000) or email (email@example.com). The Steptoe & Johnson LLP website can be accessed at www.steptoe.com.
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