Fulfilling a promise made in a November order, the Federal Energy Regulatory Commission ("FERC") on March 22 filed suit against the Idaho Public Utilities Commission ("IPUC"), asserting that the IPUC violated FERC rules under the Public Utility Regulatory Policies Act ("PURPA"). The lawsuit follows on the heels of a March 15 FERC order (Grouse Creek Wind Park LLC, EL13-39-000), in which FERC found another IPUC PURPA violation, meriting a second enforcement action against the IPUC. FERC's actions are extraordinary, marking the first time FERC has exercised its PURPA enforcement authority directly against a state commission.

PURPA, passed in 1978, was the first blow struck against the traditional industry model of regulated, vertically-integrated utility monopolies. Passed in response to the energy crises of the 1970s, PURPA was intended to open the generation market to small, independent producers. Thus, PURPA mandates that utilities purchase power from "Qualifying Facilities" ("QFs") -- generally, smaller, independently-owned renewable generation facilities -- at "avoided cost" rates, equal to the cost of the marginal resource the utility would have to purchase if it did not buy from the QF. This purchase obligation lies at the heart of the FERC-IPUC controversy.

Continue reading "New Front In Western Wind War: FERC Files Suit Against Idaho PUC, Finds Second PURPA Violation " »

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.

Continue reading "Western Wind War Widens: FERC Announces Intent to Sue Idaho PUC Over Rejected PURPA Contracts" »

After a hiatus for its August break, FERC this week leaped back into the fray between Pacific Northwest wind developers and utilities, issuing another ruling addressing the contentious -- and intensely litigated -- issue of whether wind generation can be curtailed during periods of low demand. The order, Idaho Wind Partners 1, LLC, addresses a dispute between the Idaho Public Utility Commission ("IPUC") and wind developers concerning whether Idaho Power Company can curtail production from wind generators. In the Idaho Wind order, FERC concludes that the IPUC's proposal to allow curtailments of purchases from wind generators violates FERC rules.

Idaho Wind involves eleven wind projects that sell to Idaho Power under twenty-year contracts at avoided-cost rates set in accordance with the Public Utility Regulatory Policies Act of 1978 ("PURPA"). Generally considered the first act in the ongoing drama of restructuring the electric utility regulation, PURPA requires utilities to purchase power produced by "Qualifying Facilities" ("QFs") (relatively small, independently-owned generators fired by cogeneration or renewable technologies) at "avoided-cost" rates (the cost the utility would otherwise incur to purchase power from marginal resources).

Continue reading "FERC Fires Another Shot In Northwest Wind Wars" »