posted on Tuesday, October 18, 2005 2:09 PM
by
Tracy Davis
FERC Shoots Down First Public Utility to Seek Waiver of QF Purchase Requirement
On the same day that it proposed a rulemaking implementing many provisions of the Energy Policy Act of 2005 (EPAct 2005) regarding qualifying small power production and cogeneration facilities (QFs), FERC shot down the first request of a traditional public utility under EPAct 2005 for exemption from the requirement that it purchase the output of a QF at an avoided-cost price.
Alliant Energy was the first of several utilities to request FERC to waive its power purchase requirements with respect to QFs within the service territories of two of its operating utilities [See Alliant Becomes First to Try for EPAct Waiver, 9/22/2005], based on EPAct 2005's elimination of that requirement in certain cases. This week FERC denied the request, without prejudice, on procedural grounds. FERC did not engage Alliant's contention that proximity to markets administered by the Midwest Independent System Operator provides a "competitive market" for QFs, the existence of which is a prerequisite under EPAct 2005 for exemption from the mandatory purchase requirement. Instead, FERC pointed to Alliant's failure to meet EPAct 2005's requirement that an applicant for exemption provide "sufficient notice to potentially affected qualifying … facilities." According to FERC, mere publication of the notice of the application for waiver of the mandatory purchase requirement in the Federal Register did not satisfy the "sufficient notice" requirement. FERC clarified that any entity seeking relief from this power purchase requirement must identify to FERC any QFs that would be affected, including both existing QFs and QFs under development. FERC plans to establish a rulemaking in the near future to address the statutory elimination of the power purchase obligation contained in the EPAct. [Alliant Energy Corporate Services, Inc., 113 FERC ¶ 61,024 (2005) UPDATE]