The energy team over at R Street submitted comments this week to the Federal Energy Regulatory Commission’s (FERC) on proposed changes to the Public Utility Regulatory Policies Act (PURPA) regarding the rules governing qualifying facilities (QF) and longterm purchase agreements in wholesale competitive markets.
Michael Haugh at R Street writes: “Competitive wholesale markets are one of the best ways to provide low cost, efficient power to customers. A recent study by the U.S. Energy Information Association found that between 2008 and 2017, more than 103 gigawatts (“GW”) of renewable generation have come on line, but only 14 GW are certified as a QF. This shows that renewable generation has evolved to become competitive with traditional generation sources. Along with RPS enacted by states, robust wholesale markets have provided stable revenues for renewable generators. Many states hold competitive auctions to procure resources for their RPS requirements, which create a market for renewable generators. These markets limit the necessity for the QF designation and the long-term purchase agreements that come with it. The QF purchase agreements can lead to a suppression of the market in the instance where a QF does not win, or even participate in, a state RPS auction and then requires the state to honor the QF obligation. Situations like these can lead to higher overall costs for the utility customers which, in turn, defeat the purpose of the competitive solicitation.”
Read R Street’s full comments here. The FERC docket number is RM19-15-000. Public comments are due later this month. Further details about FERC’s proposed rulemaking to modernize PURPA is available at FERC.gov.