FERC Issues Declaratory Order On QFs' PURPA Rights

On July 21, 2016, FERC issued a declaratory order related to a qualifying facility's ("QF") right to sell its capacity and energy pursuant to a legally enforceable obligation under the Public Utilities Regulatory Policies Act of 1978 ("PURPA"). Specifically, FERC held that: (1) regardless of whether a QF has previously sold its renewable energy credits ("RECs") under a separate contract, a QF has the right to sell its output pursuant to a legally enforceable obligation ("LEO"), and (2) regardless of whether a QF has participated in a request for proposal, a QF has the right to obtain a LEO.

FERC's declaratory order results from a petition brought by Windham Solar LLC ("Windham") and Allco Finance Limited ("Allco") against the Connecticut Public Utilities Regulatory Authority ("Connecticut Authority"). The petition challenged a Connecticut law, which, according to Windham and Allco, prevented a QF that has already separately sold its RECs from then selling energy and