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FERC Proposal Would Shake Up Renewable Energy Pricing

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On Sept. 19, the Federal Energy Regulatory Commission issued a notice of proposed rulemaking in FERC Docket Nos. RM-19-15-000 and AD16-16-000,1 recommending substantial modifications to its regulations concerning the Public Utility Regulatory Policies Act of 1978, or PURPA.2

The NOPR proposes extensive changes to critical components of the PURPA framework, including the qualifying facility, or QF, rate calculation, the one-mile rule and the QF purchase mandate. If adopted, those changes could significantly affect the ability of QFs to require electric utilities to purchase their output — and the price that utilities will have pay for that output.

In general, the proposals in the NOPR appear to be designed to provide QFs with market-clearing prices for their output, rather than avoided-cost rates, and to modify QF purchase requirements.

To read the full article, please download the PDF below. This article was first published on Law360 on 8 October 2019.

  1. Qualifying Facility Rates and Requirements, Implementation Issues Under the Public Utility Regulatory Policies Act of 1978, 168 FERC paragraph 61,184 (2019) (NOPR).
  2. Pub. L. No. 95-617, 92 Stat. 3117 (1978) (codified as amended at 16 U.S.C. Section 824a-3 (2012)).