Latest Round in PURPA Wars: Fifth Circuit Upholds Texas Rule Limiting PURPA Rights of Wind Generators
Earlier this week, the United States Court of Appeals for the Fifth Circuit issued the latest salvo in the PURPA wind wars, this time handing wind producers a painful defeat. The Fifth Circuit's opinion upholds a rule issued by the Public Utility Commission of Texas ("PUCT") preventing non-firm resources from forming Legally Enforceable Obligations under PURPA. If the Fifth Circuit opinion stands, it could limit the ability of wind producers to obtain access to electricity markets under PURPA (the Public Utility Regulatory Policies Act), a 1978 law aimed at allowing small independent and renewable energy producers (referred to as "Qualifying Facilities" or "QFs") access to electricity markets controlled by regulated utility monopolies.
The Fifth Circuit opinion, however, may not be the final word. The Fifth Circuit's opinion is at odds with the Federal Energy Regulatory Commission's ("FERC") 2009 declaratory order in the same dispute, which found the PUCT rule to be contrary to FERC regulations requiring that "[e]ach qualifying facility shall have" the option to sell energy under a "legally enforceable obligation." In addition, a lengthy dissenting opinion issued by Judge Edward C. Prado suggests that the majority's reasoning may be vulnerable, both in its primary conclusion and in supporting conclusions related to the degree of deference owed to FERC's interpretation of PURPA and federal regulations.