Recent Federal Energy Regulatory Commission orders remind industry participants that even small renewable energy projects create the potential for regulatory challenges, particularly if required notices and/or rate schedules are not submitted to FERC on a timely basis.
For example, the owners of solar and wind generation facilities that qualify as small power production qualifying facilities, or QFs, pursuant to the Public Utility Regulatory Policies Act of 1978, or PURPA, can be subject to refund obligations and possible civil penalties if they do not confirm the applicability or continued applicability of regulatory exemptions — or, if required, file a market-based rate schedule with FERC.
Additionally, the owners of older QFs should remember that rolling off a power purchase agreement, or PPA, may trigger rate schedule filing requirements. It is important to note that the triggers for certain FERC requirements are frequently considered on an aggregate basis for QFs under common ownership and control — so even a very small facility could be subject to notice and/or rate schedule requirements if it is under common ownership with other QFs located proximate to it.
This article also highlights some FERC refund precedent that may be of interest to renewable generation owners — FERC may consider its refund authority to be broader than may be expected. Renewable energy resource owners should focus on FERC notice and rate filing requirements not only as projects are being developed, but also once the projects are operational. In certain circumstances, the size of projects will be considered on an aggregate basis for rate and notice filing requirements. Further, the termination of older PPAs may trigger the need for FERC approvals.
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