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ARTICLE · 22 SEPTEMBER 2014

Some PURPA Qualifying Facilities Are More Qualified Than Others

Foley Hoag LLP
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A divided panel of the 5th Circuit held that the Texas Public Utilities Commission had authority to limit the universe of "Qualifying Facilities" under PURPA.

United StatesEnergy and Natural Resources
Seth Jaffe
Seth Jaffe
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In a fascinating decision last week, a divided panel of the 5th Circuit Court of Appeals held that the Texas Public Utilities Commission had authority to limit the universe of "Qualifying Facilities" under the Public Utilities Regulatory Policies Act which can choose to enter into a "legally enforceable obligation" requiring a utilities to purchase power from a renewable energy producer. The decision could be a big problem for wind power facilities in jurisdictions less than fully hospitable to renewable energy.

FERC's rules implementing PURPA provide in part that:

Each qualifying facility shall have the option either:

(1) To provide energy as the qualifying facility determines such energy to be available for such purchases, in which case the rates for such purchases shall be based on the purchasing utility's avoided costs calculated at the time of delivery; or

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