On November 8, 2019, Representative Frank Pallone, Jr. (D-NJ), Chairman of the House Energy and Commerce Committee, and Representative Bobby L. Rush (D-Ill.), Chairman of the Subcommittee on Energy (collectively the “Chairmen”), wrote a letter to FERC Chairman Neil Chatterjee expressing their concerns regarding FERC’s proposed changes to sections 201 and 210 of the Public Utility Regulatory Policies Act (“PURPA”).
On September 19, 2019, FERC issued a Notice of Proposed Rulemaking (“NOPR”), proposing to revise its regulations implementing sections 201 and 210 of PURPA, in light of changes in the electric industry since PURPA’s enactment in 1978, including increased domestic natural gas production, increased renewable energy development, and decreased technology costs (see September 25, 2019 edition of the WER).
In their letter to Chairman Chatterjee, the Chairmen noted that despite changes in the energy landscape, PURPA continues to play an essential role in ensuring small independent power producers and co-generators can compete with “incumbent” utilities. They also highlighted the importance of consumer preferences, state policies, technological change, as well as economic trends that favor renewable energy resources and encourage transition to a cleaner and more efficient energy grid.
The Chairmen acknowledged that though Congress has considered myriad proposals to reform PURPA, three basic tenets have always been preserved: (1) encouraging qualifying facility (“QF”) development; (2) preventing discrimination against QFs by incumbent utilities; and (3) ensuring equitable and affordable rates for customers. The Chairmen expressed their concern that FERC’s proposed changes would put these tenets at risk and constitute a wholesale rewrite of PURPA. The Chairmen also voiced their concern that FERC’s proposal to modify PURPA’s avoided cost calculation and reduce the 20-megawatt rebuttable presumption would create an insurmountable barrier for some QFs to obtain financing.
To better understand FERC’s proposed NOPR, the Chairmen posed six multi-part questions to FERC regarding a variety of subjects, including QF financing, elimination of fixed price contract requirements, and sufficiency of evidence in the record to support several aspects of the NOPR. The Chairmen asked FERC to provide a prompt and thorough response to each question by November 25, 2019.
Click here to read the full letter.