In a major escalation of an ongoing dispute between wind developers and the Idaho Public Utilities Commission ("IPUC"), the Federal Energy Regulatory Commission ("FERC") on November 20 issued an order giving notice that it will take enforcement action directly against the IPUC for violations of the Public Utility Regulatory Policies Act ("PURPA"). The order marks the first time FERC will take action under PURPA directly against a state utility commission.
The order is the latest, and most significant, offensive launched in a battle going back to 2010, when the several utilities filed a petition with the IPUC claiming that wind developers in Idaho were artificially segregating wind projects so that the projects could qualify under the 10 aMW ceiling for PURPA treatment. PURPA, passed in 1978, in most cases requires utilities to purchase power from qualifying small power production facilities at a favorable avoided-cost rate. On February 7, 2011, the IPUC issued an order stating that it would investigate the utilities' claims and would, in the interim, reduce the PURPA eligibility ceiling in Idaho from 10 aMW to 100 kW. Subsequently, the IPUC rejected a number of wind contracts on the ground that the generators exceeded to 100 kW threshold.