Broadview Solar, LLC (Broadview) made various filings with FERC seeking a determination that its facility met the qualifications for a small power production QF because, due to all elements of its solar facility including the inverters, its output would not exceed 80 MW. On September 1, 2020, FERC issued an order denying QF status to Broadview, finding that a facility’s “power production capacity” is determined by its “maximum net output.”2 In Broadview’s case, FERC initially concluded that the maximum net output was 160 MW, even though the facility’s inverters precluded an output exceeding 80 MW (after consideration of losses).
Broadview sought a rehearing of the September 1 order. In its March 19 order, FERC set aside its September 1 order, noting PURPA does not define “power production capacity” or explain how FERC is to determine the power production capacity of a particular facility. Thus, PURPA does not directly address the question of “how to measure the power production capacity of a facility whose generating subcomponents (e.g., solar panels) have a nameplate capacity of greater than 80 MW, but which is physically incapable of producing more than 80 MW for sale to the interconnected electric utility at any one point in time.”3 FERC wrote that in the past it had looked to the maximum amount of power the facility could produce for sale to the interconnecting utility, and therefore, its September 1 order was an anomaly.
The March 19 order notes that, in enacting PURPA, Congress intended to encourage the development of QFs. In early orders under PURPA, FERC recognized that while the ratings of a facility’s generating equipment may exceed 80 MW, its power production capacity is “the maximum net output of the facility which can be safely and reliably achieved under the most favorable operating conditions likely to occur over a period of several years...”4 The March 19 order also points to an earlier rulemaking that “further underscored [FERC’s] view that a qualifying facility includes all components necessary to produce electric energy in a form useful to an interconnected entity...”5
FERC concluded that Broadview’s solar facility is distinct from the facilities at issue in earlier orders, due to its 200 MWh battery energy storage system and 160 MW solar array, but that those differences are not material when determining whether the facility meets the 80 MW limitation on power production capacity to be a QF. FERC notes that Broadview’s facility is likely to meet the 80 MW maximum on a more consistent basis, but that the facility cannot provide more than 80 MW at any point in time to the interconnected utility. Finally, FERC notes that Form 556, used by generation facilities to demonstrate QF status, is a data collection tool that is not meant to be a “mechanical rule that dictate[s] whether a facility constituted a QF.”6 As a result, FERC concluded that Broadview qualified as a small power QF.
Commissioners Danly and Christie dissented from the March 19 order. Commissioner Danly issued a dissenting opinion pointing out that Broadview’s Form 556 demonstrates that its power production capacity exceeds 80 MW, even though it can only deliver 80 MW to the interconnecting utility, because additional power can be diverted to its battery storage facilities.7 Commissioner Danly states further that PURPA requires an analysis of power production capacity, rather than power delivery capacity and that prior FERC precedent is inconsistent with the majority’s conclusion in this case. Commissioner Danly noted that prior precedent permitted generation facilities to reflect line losses and similar reductions in their calculations, but did not cover a facility that is configured in a way that permits it to generate more than 80 MW, while using battery storage for a portion of its output and delivering only 80 MW to the interconnected utility.8 Commissioner Danly would modify the holding in the September 1 order to make clear that the QF analysis should focus on the send-out capability of a generation facility, but that in the Broadview situation, the facility still exceeds the 80 MW limit.
- Broadview Solar, LLC, 174 FERC ¶ 61,199 (2021). The order can be found at ferc.gov.
- Broadview Solar, LLC, 172 FERC ¶ 61,194 (2020).
- March 19 Order at P 23.
- March 19 Order at P 27 (quoting Occidental Geothermal, Inc., 17 FERC p. 61,231 at p. 61,445 (1981)).
- March 19 Order at P 30 (citing Streamlining of Regulations Pertaining to Parts II and III of the Federal Power Act and the Public Utility Regulatory Policies Act of 1978, Order
- No. 575, 70 FERC p. 61,022 (1995)).
- March 19 Order at P 38. Under the calculation methodology set forth in Form 556, Broadview’s output exceeds the 80 MW limit for small power production facilities.
- March 19 Order, Danly Dissenting Opinion at P 7.
- March 19 Order, Danly Dissenting Opinion at P 34.
Client Alert 2021-085
