FERC Revises Its PURPA Rules

On July 16, 2020, the Federal Energy Regulatory Commission (FERC) issued a News Release announcing that its regulations over qualifying small power producers and cogenerations under the Public Utility Regulatory Policies Act of 1978 (PURPA) have been revised (takes effect 120 days after publication in the Federal Register). Per FERC, the revisions are intended to “address the significant changes that have taken place in the nation’s energy markets since those rules first took effect.”

According to the FERC News Release:

  • “The final rule grants additional flexibility to state regulatory authorities in establishing avoided cost rates for QF sales inside and outside of the organized electric markets. The final rule also grants states the ability to require energy rates (but not capacity rates) to vary during the life of a QF contract.”

  • “FERC also modified the ‘one-mile rule’ and reduced the rebuttable presumption for nondiscriminatory access to power markets, from 20 megawatts to 5 megawatts, for small power production, but not cogeneration, facilities.”

  • “Finally, in order for a QF to establish a legally enforceable obligation, the final rule requires that the QFs must demonstrate commercial viability and financial commitment to build under objective and reasonable state-determined criteria.”

  • “The final rule does not change other elements to the Commission’s existing PURPA regulations that encourage QF development, including those requiring electric utilities to provide backup electric energy to QFs on a non-discriminatory basis and at just and reasonable rates; requiring electric utilities to interconnect with QFs; and providing exemptions to QFs from many provisions of the Federal Power Act and state laws governing utility rates and financial organization.”

See the FERC News Release here:

https://www.ferc.gov/news-events/news/ferc-modernizes-purpa-rules-ensure-compliance-reflect-todays-markets

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