FERC upholds right of cooperatives to buy from independent generators

Dive Brief:

  • The Federal Energy Regulatory Commission (FERC) has affirmed the right of the Delta-Montrose Electric Authority (DMEA), a distribution cooperative, to buy electricity outside of purchases from Tri-State Generation & Transmission Association.

  • FERC had earlier approved DMEA’s right to buy power outside of Tri-State, but the G&T utility sought to impose a fee for the lost revenue. FERC barred that fee.

  • DMEA’s purchases outside of Tri-State are made possible under the public Utility Regulatory Policies Act of 1978 (PURPA), the federal regulators noted. 

Dive Insight:

FERC’s affirmation of cooperatives’ right to purchase electricity from independent generators under PURPA bolsters the prospects for distributed energy in rural areas.

There are more than 900 electric cooperatives in the U.S., and many are seeking to build out more local, renewable energy, often at the expense of G&T cooperatives that serve them, according to Greentech Media. There are 177 MW of cooperative solar farms in operation and 375 MW under development, according to the National Rural Electric Cooperative Association.

FERC’s ruling “will further DMEA’s long-term strategic goal of diversifying our power supply,” DMEA CEO Jasen Bronec said in a statement.

Cooperatives in other states are already engaged in building renewable resources. In Texas, Pedernales Electric Cooperative is building up to 15 MW of solar power in its territory.

“This ruling will most likely be a wake-up call for G&T providers to scale up procurement of solar on behalf of distribution co-ops, now that there's the risk of developers pitching projects directly to their co-op members,” Cory Honeyman, associate director of U.S. solar at GTM Research, said in the GTM article.

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Filed Under: Generation Transmission & Distribution Solar & Renewables Distributed Energy Regulation & Policy