A PURPA complaint before the Michigan PSC, accessible through the article Michigan Utility Under Fire For Alleged PURPA Violations, teaches a good lesson about words. The QF complainant (Greenwood Solar) stated that a utility (DTE): 1) has an obligation to buy capacity even if unneeded; and 2) needs to obtain a waiver from FERC in order to be absolved of the requirement to buy capacity. Indeed, in a fairly recent case cited by Greenwood Solar, FERC reiterated its regulation that specifically requires that a utility purchase any energy and capacity made available by a QF. PURPA regulations state that energy and capacity purchases are mandatory, but for the exemption for purchases from over 20 MW QFs that most utilities in organized markets have obtained. The complaint alleges that respondent DTE insisted that it had no obligation to purchase unneeded capacity from a QF. A close reading of FERC’s exact words on the topic supports Greenwood Solar’s contention that an obligation to purchase capacity exists, despite any need. Although this policy appears counterintuitive, the policy is logical when coupled with other words issued by FERC – that a utility that lacks a need for capacity may lawfully fulfill its purchase obligation by offering a QF a price for capacity of $0.00/MW.
Continue Reading Words with Enemies – PURPA and the Capacity Purchase Obligation