In a July 2, 2020 Order, FERC declined to answer a question in a Petition for Declaratory Order (PDO) concerning whether a set of off-system QFs could deliver power to a utility at a Point of Delivery (POD) that was constrained. This question is important because if answered affirmatively, it could result in the utility’s ratepayers having to pay upgrade costs to ensure that all firm transmission service reservations can be accommodated in addition to paying for power from a QF at an avoided cost rate. In the Blue Marmots case, the QFs sought two findings from FERC:
to declare that transmission congestion on the purchasing utility’s system does not relieve the electric utility of its mandatory obligation to purchase from a QF under PURPA, where all other predicates to the creation of a LEO have been established.
… to declare that the Commission’s direction in section 292.306 of the Commission’s regulations that QFs are obligated to pay such interconnection costs as are assessed by state regulatory authorities extends only to the physical interconnection between the QF and the utility system to which it is directly interconnected, not to other aspects of transmission service over which the Commission retains authority.
The first request was probably unnecessary, as the PURPA purchase obligation is relatively absolute in FERC’s view. The only issue is one of price, i.e., who has to pay to relieve the congestion; the answer to the second question thus may determine whether the QF chooses to sell to this utility. The QF still can sell, if the deciding body decides it must the pay to relieve congestion; it remains the QF’s choice. It is the second issue thus that is far more relevant and has not been addressed by FERC. And, it still has not.
Continue Reading FERC Declines to Answer Question of Impact of Off-System QFs Choosing Constrained Points of Delivery