FERC Dismisses NERA Net Metering Petition; Announces PURPA Reform

Source: rlmartin

On July 16, 2020, the Federal Energy Regulatory Commission (FERC) dismissed the New England Ratepayers Association's (NERA) request for a declaratory order that FERC has exclusive jurisdiction over electricity sales from consumer-sited generation (Docket Number EL20-42-000). NASEO, and many of the states, filed a protest and comments in the case opposing the request to FERC. 

In FERC's unanimous decision, the Commissioners dismissed the petition on procedural grounds, finding that the NERA request did not identify a specific controversy or harm for FERC to address. Commissioner McNamee and Commissioner Danly concurred with the decision, but issued separate statements outlining that the substantive issues raised in NERA's petition should be addressed by FERC eventually through rulemaking or other means. NASEO filed comments in opposition to NERA's petition because it would have eliminated state authority over net metering; numerous State Energy Offices, State Attorney Generals, State Public Utilities Commissions, and NARUC among others also opposed the petition.

FERC in the same meeting also finalized new rules for implementing the Public Utility Regulatory Policies Act of 1978 (PURPA). In the 3-1 vote, FERC largely approved the changes to PURPA proposed in September 2019, including the following:

  • State regulatory authorities are now allowed to set the rates paid to qualifying facilities (QFs) - small power producers and cogenerators - at a variable wholesale rate depending on market fluctuations at the time the power is delivered rather than a fixed cost over the length of the contract;
  • The presumption that QFs with a net capacity at or below 20 MW do not have nondiscriminatory access to wholesale markets is reduced to 5 MW for small power production facilities (but remains unchanged for cogeneration facilities);
  • The one-mile rule, which is used to determine whether generation facilities are considered to be at the same site, was modified to allow utilities to show that facilities that are located more than one mile apart, but less than 10 miles apart, constitute a single facility.

FERC Commissioner Glick dissented, stipulating that it is Congress' role and not the role of the Commission  to reform PURPA.