Tuesday, September 8, 2020
On September 1, 2020, the Federal Power Regulatory Fee (“FERC” or “Fee”) issued an order breaking with a long time of precedent relating to the way it will decide whether or not a renewable useful resource is eligible for certification as a qualifying small energy manufacturing facility (“QF”) pursuant to the Public Utility Regulatory Insurance policies Act of 1978, as amended (“PURPA”). The results of the Fee’s order is that renewable assets will now not have the power to qualify for QF standing by voluntarily limiting their output to adjust to the 80 MW cap on small energy manufacturing services. Commissioner Richard Glick dissented and we anticipate that events to the continuing will search rehearing and presumably attraction the order to federal courtroom. Bracewell will hold you up to date on vital PURPA developments.
PURPA and the Fee’s implementing laws restrict a small energy manufacturing QF’s capability to a “energy manufacturing capability” of 80 MW. When evaluating whether or not a facility complied with this requirement, the Fee centered on the “most web output of the power that may be safely and reliably achieved below probably the most favorable working situations more likely to happen over a interval of a number of years.” In follow, the Fee’s concentrate on the utmost web output of the power—reasonably than the put in capability of the tools on the website—has meant that builders have been in a position to qualify for QF standing by voluntarily putting in management methods or taking different steps to restrict the sustainable web output of the era facility in any given hour to 80 MW or much less, even when the put in era capability of the power exceeded the 80 MW cap.
Within the continuing ensuing within the September 1 Order, the Fee thought-about whether or not a mixed photo voltaic and storage facility owned by Broadview Photo voltaic, LLC complied with the 80 MW cap. The power at situation consisted of a 160 MW photo voltaic array and a 50 MW battery storage system that might connect with 82.5 MW DC-to-AC invertors. As a result of any power produced by the photo voltaic array and battery storage system would have to be transformed from DC energy to AC energy previous to the injection within the grid, the utmost achievable output from the power in a given hour was 82.5 MW. Thus, though the put in capability of the photo voltaic array and storage system exceeded the 80 MW cap, Broadview defined that the web output of the power, taking into consideration losses and station load, may by no means exceed 80 MW.
The Fee rejected Broadview’s arguments, nevertheless, and located that Broadview’s facility can not meet the necessities for QF standing. The Fee acknowledged that earlier orders had allowed “services with better energy manufacturing capacities to be licensed as QFs when the web output was not more than 80 MW.” The Fee discovered, nevertheless, that this interpretation was inconsistent with the plain language of PURPA limiting the “energy manufacturing capability” of QFs to 80 MW. Whereas the Fee acknowledged that the inverters had been solely able to changing 80 MW into AC energy, the Fee noticed that this was merely a “conversion restrict” and that the photo voltaic array alone had the aptitude to provide 160 MW of DC energy. In keeping with the Fee, “[u]tilizing inverters to restrict the output of an in any other case above-80 MW energy manufacturing facility to 80 MW is . . . inconsistent with the kind of facility that Congress specified can qualify as a small energy manufacturing facility (i.e., a facility sized 80 MW or much less).” For that purpose, the Fee discovered that Broadview’s facility didn’t meet the necessities to qualify as a QF.
Recognizing the potential impression of its abrupt change in coverage, the Fee defined that its discovering would solely be utilized prospectively. In consequence, the Fee’s order won’t have an effect on “QFs which have self-certified [through the submission of FERC Form 556] or have been granted Fee certification previous to the date of” the Fee’s order, even when the self-certification filed by the power “included changes for inverters or different output-limiting units to calculate its most web energy manufacturing capability as 80 MW or much less.”
The Fee’s order represents a marked departure from Fee precedent that successfully eliminates the power of renewable assets to satisfy the QF certification necessities by limiting the output of their facility in order that it doesn’t exceed 80 MW. Though the Fee indicated that it could solely apply this dedication prospectively, the Fee’s choice may have vital implications for initiatives which are within the closing stage of growth, however haven’t but filed a discover of self-certification to FERC. The Fee emphasised, for instance, that the proprietor of a facility with a legally enforceable obligation couldn’t profit from “grandfathered” standing for the power within the absence of a self-certification Type 556 submittal or FERC order granting certification earlier than September 1, 2020. Additionally, the Fee’s order doesn’t handle whether or not the Fee could be keen to revisit the QF standing of services that submit a discover of re-certification with a purpose to report a change within the information reported in its preliminary certification, together with upgrading, modernizing or retrofitting current services. The Fee did, nevertheless, make clear that load and line losses may proceed to be factored in when measuring a facility’s 80 MW most web energy manufacturing.
The Fee expressly declined to handle how the capability of an power storage system needs to be taken under consideration for QF functions – a side of the continuing that many had been following. In quite a few latest proceedings, corporations growing renewable assets mixed with battery storage have taken the place that the capability of a battery storage system shouldn’t be included when calculating the web capability of the power on the premise that the storage doesn’t characterize a further supply of unbiased energy era and merely permits the power to shift the time of manufacturing; in these circumstances, nevertheless, the QF certification software was withdrawn earlier than FERC made a substantive dedication on the problem. Broadview took an analogous place on this continuing, arguing that aggregating the mixed capability of the photo voltaic array with the power storage system would artificially inflate the mixture capability of the power elements. The Fee discovered that it didn’t have to handle that situation on this case as a result of the 160 MW photo voltaic array by itself with out contemplating the power storage services was already double the 80 MW cap.
 Broadview Photo voltaic, LLC, 172 FERC ¶ 61,194 (2020).
 16 U.S.C. §§ 796(17), 824a-3; 18 C.F.R. § 292.204.
 Occidental Geothermal, Inc., 17 FERC ¶ 61,231, at 61,445 (1991).
 Id. at P 3.
 Id. at P 21.
 Id. at P 25.
 See id. at P 27.
 See id. at P 27.
 See id.
 Id. at P 21 n. 57.
 See, e.g., NorthWestern Corp., 168 FERC ¶ 61,049 (2019).
 Broadview, 172 FERC ¶ 61,194, at P 21 n. 57.