The Energy Policy Act of 2005 (EPAct 2005), as implemented by FERC under Order 688, allows public utilities, under certain circumstances, to apply to terminate their obligation to enter into power purchase agreements with qualifying facilities (QFs). For example, FERC established a rebuttable presumption that larger QFs (those with generating capacity in excess of 20 MW) with access to the energy markets maintained by Midwest ISO, PJM Interconnection, ISO New England, and New York ISO could not force utility companies to purchase their output.
Since Order 688, FERC decisions have clarified the circumstances under which a QF's existing petition for a legally enforceable obligation will be given effect even after a utility company's obligation to purchase power from QFs is otherwise terminated.
Most recently, FERC reexamined its April 15, 2010 order that granted in part an application by the Public Service Company of New Hampshire (PSNH) to terminate its mandatory purchase obligation, but determined that PSNH would remain obligated to purchase electricity from Clean Power Development, LLC (Clean Power). Clean Power had already submitted a petition to create a legally enforceable obligation to the New Hampshire Public Utilities Commission (PUC). In denying PSNH's request for rehearing, FERC on January 20, 2011, explained that it had not, in its April 15 order, determined that there was a legally enforceable obligation. Rather, FERC clarified that “if as a result of Clean Power's petition before the New Hampshire Commission there was a contract or legally enforceable obligation, then it would be grandfathered.” Consequently, although PSNH's obligation to purchase electricity from other large QFs was terminated, it would nonetheless be required to buy from Clean Power if the New Hampshire PUC determined to grant a legally enforceable obligation.