FERC Proposed Rulemaking Seeks to Update PURPA Regulations

On September 19, 2019, the Federal Energy Regulatory Commission (“FERC”) proposed changes to update its regulations implementing the Public Utility Regulatory Policies Act of 1978 (“PURPA”).


PURPA was enacted by Congress in part to encourage the development of small power producers and cogenerators, known as qualifying facilities (“QFs”), and of appropriate price structures for their outputs. FERC’s PURPA regulations established in 1980 relating to QFs remain in effect today with relatively modest changes.


FERC’s News Release indicates that its Notice of Proposed Rulemaking (“NOPR”) is intended “to modernize its regulations … to better address consumer concerns and market changes in the energy landscape in recent decades.” The News Release futher states: “The NOPR focuses on providing flexibility to state regulatory authorities so they can accommodate recent wholesale power market developments and streamlines the Commission’s policies and practices. Specifically, the proposal allows states to incorporate market pricing into avoided cost energy rates in various ways, allows states to require energy rates (but not capacity rates) to vary during the life of QF contracts, modifies the ‘one-mile rule,’ and lowers the threshold presumption for nondiscriminatory access to power markets from 20 megawatts to 1 megawatt for small power production, but not cogeneration, facilities. It also requires states to establish objective and reasonable standards for QFs to obtain legally enforceable obligations for the purchase of their power. Finally, the proposal permits protests of a QF’s self-certification or self-recertification without the need to file and pay for a separate petition for declaratory order.”


FERC Commissioner Richard Glick dissented.


Comments are due 60 days after publication in the Federal Register.


For more information, view FERC’s News Release, Staff Presentation, and Fact Sheet at https://www.ferc.gov/media/news-releases/2019/2019-3/09-19-19-E-1.asp#.XYP8-JNKjqQ

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