In a recent opinion, the DC Circuit clarified the limits of FERC’s and the federal appellate courts’ PURPA jurisdiction, and held that the courts of appeal lack jurisdiction to review FERC rulings that merely interpret a PURPA issue. Such “rulings” are mere advisory opinions. The Court criticized FERC for using seemingly mandatory language in its “order,” when in fact FERC neither intended nor had jurisdiction to issue a binding ruling on the PURPA issues.

Portland General Electric Co. v. FERC[1] involved a dispute between a small power producer (PáTu) and the utility (Portland) to whom it made off-system PURPA sales. The dispute centered on whether Portland could require PáTu to block schedule its power sales and decline to make avoided cost purchases of non-scheduled amounts. PáTu filed a complaint with the Oregon Public Utilities Commission (OPUC) challenging the practice, but the OPUC’s ruling (affirmed in state court) allowed Portland to refuse to purchase power in excess of scheduled amounts.

PáTu then filed a complaint with FERC, claiming inter alia that Portland’s practices violated PURPA. FERC addressed the PURPA implementation issue, and determined that contrary to the OPUC’s ruling, Portland was required to purchase PáTu’s entire net power output, and could not circumvent this obligation by imposing overly-rigid scheduling requirements.

Portland petitioned for review in the DC Circuit, and FERC argued that the Court lacked jurisdiction to review FERC’s ruling on the PURPA issue. The Court agreed with FERC, and provided clarification of PURPA’s framework for enforcement and judicial review.

Avenues for judicial review under PURPA are narrower than those under the FPA, and depend on the substantive PURPA provision implicated. Under PURPA, FERC enacts regulations to carry out PURPA’s mandates, while the states must implement FERC’s regulations, including determining the avoided-cost rate that utilities pay for QF sales. Turning to PURPA’s enforcement provisions, § 210(g) provides that “action[s] against any electric utility [or] qualifying small power producer … to enforce any requirement” created by a state’s implementation of PURPA are to be adjudicated in the appropriate state court. The DC Circuit emphasized that “State-based adjudication serves as the mainstay for enforcing PURPA rights.”

Conversely, PURPA gives FERC and the federal courts a “more limited role.” Section 210(h) allows FERC to bring an action in federal district court to enforce PURPA requirements under two circumstances.[2] First, under § 210(h)(1), FERC may bring an action to enforce PURPA rules it has prescribed, if and only if such enforcement requires regulating “any operations of an electric utility [or qualifying facility] which are subject to [FERC’s FPA] jurisdiction.” As the Court put it: “[If] a PURPA enforcement action, in effect, regulates interstate transmission or wholesale generation … then FERC, not the state, oversees the enforcement action.”[3] Second, under §210(h)(2), FERC may bring an action against a state PUC or non-regulated utility to challenge such an entity’s implementation of PURPA.

In Portland General, FERC purported to rule on the PURPA issues raised in PáTu’s complaint. As the DC Circuit held previously,[4] such orders are of “no legal moment” and “merely advise[] the parties of the Commission’s position.” Under PURPA’s enforcement scheme, FERC is not authorized to issue binding orders deciding PURPA disputes, and is limited to pressing its position in an enforcement action in federal district court. There is accordingly no provision for direct appellate review of FERC orders that interpret PURPA, and thus the DC Circuit lacked jurisdiction.

The Court further held that an exception for “mandatory” PURPA orders—which it had previously[5] “speculated” might confer jurisdiction in the courts of appeals under narrow circumstances—did not apply. Although FERC’s order contained some seemingly mandatory language (e.g., the Commission stated it was “partially grant[ing] PáTu’s complaint” and “ordering Portland General to accept PáTu’s entire net output”), it set no deadlines and did not specify any repercussions for non-compliance. Under those circumstances, the order was merely declaratory and thus the Court lacked jurisdiction to review it. The Court did admonish FERC for its “continued use of mandatory language to resolve PURPA disputes in orders that it later insists are purely hortatory,” and noted that confusion could be avoided if FERC made clear that its “discussions of PURPA-related issues are advisory only.”

The case is notable in reiterating the limits of both FERC’s and the federal courts’ role in adjudicating PURPA disputes.