FERC Decision Limits California Use of Feed-In Tariffs

Originally published in The Climate Report, Fall 2010.

In a case that limits states' toolbox for promoting renewable energy development, the Federal Energy Regulatory Commission held that state feed-in tariffs could run afoul of FERC's exclusive jurisdiction over wholesale electricity sales. Feed-in tariffs typically support renewable energy development by requiring utilities to purchase the output of renewable resources under long-term agreements and at a premium price. Assembly Bill 1613, California's "Waste Heat and Carbon Emissions Reduction Act," established a feed-in tariff for the electric output of combined heat and power generating facilities of 20 megawatts or less that met certain efficiency and emissions standards. The California Public Utilities Commission issued an order implementing AB 1613 and adopting a price formula that investor-owned utilities in California would be required to offer such facilities for their electricity.