Comments are due by 5:00 pm EDT on October 22, 2009.

The Public Utility Commission of Texas (PUCT) recently issued an order denying a complaint by the JD Wind Companies and interpreting the Public Utilities Regulatory Policies Act of 1978 (PURPA) to prohibit wind and solar-powered qualifying facilities (QFs) from selling output under contracts with rates based on avoided costs. The PUCT held that under PURPA, wind-powered QFs are prohibited from establishing such contracts—and secure rates based on avoided costs—because wind generation is an intermittent resource, and therefore cannot provide “firm power.” The PUCT’s prohibition of QF sales apparently would apply equally to wind, solar and all other intermittent renewable power generating facilities.

On September 24, 2009, JD Wind Companies filed a Petition with the Federal Energy Regulatory Commission (FERC) for Enforcement and a Declaratory Order to overturn the PUCT’s order (FERC Docket EL09-77). JD Wind argues that the PUCT’s decision is contrary to PURPA and FERC’s PURPA regulations, which provide every QF, including renewable wind and solar-powered generating facilities, with the option to sell their output to an electric utility either as the QF determines such energy to be available or pursuant to a legally enforceable obligation. The JD Wind Companies request that FERC take enforcement action against the PUCT or, in the alternative, issue a declaratory order finding that the PUCT’s decision does not implement PURPA and FERC’s rules and therefore is preempted by federal law.

The Petition argues that FERC’s PURPA regulations do not on their face exclude wind, solar and other renewable-powered QFs from creating legally enforceable obligations to sell energy to the utility. Under PURPA, each state regulatory authority is required to implement FERC’s regulation. The PUCT’s decision, according to the petitioners, jeopardizes the development of wind and solar qualifying facilities in every region still subject to PURPA. The PUCT’s decision could lead other states to revise their regulations to eliminate such contracts for wind and solar QFs.

The JD Wind Companies seek an order no later than December 18, 2009. Comments are due October 22, 2009, on the Petition.