Two recent orders from the Federal Energy Regulatory Commission ("FERC") are likely to ratchet up tensions between that agency and state regulators here in the Northwest over enforcement federal mandatory purchase obligations established in the Public Utility Regulatory Policy Act ("PURPA") of 1978. As we have discussed previously, tensions came to a head earlier this year when FERC, apparently having lost patience with the Idaho Public Utilities Commission ("IPUC"), authorized federal court enforcement action against the IPUC. FERC filed a lawsuit against the IPUC in the U.S. District Court in March, the first time it has ever taken such action directly against a state commission.
FERC continues to add fuel to this fire. First, on June 20, the Commission issued an order in Idaho Wind Partners refusing to modify its holding that Idaho Power's "Schedule 74", which governs purchases of power from PURPA "Qualifying Facilities" ("QFs"), is inconsistent with FERC's regulations. Specifically, Schedule 74 would have allowed Idaho Power to curtail QF purchases if taking power from the QF would require Idaho to dispatch higher-cost resources to serve system load or force base load resources to back down. Idaho Power, with support from the IPUC staff, asserted that this provision is valid in light of FERC's PURPA regulations (18 C.F.R. 292.304(f)(1)), which allow curtailments of QFs in light load hours under certain circumstances.