EEI presses FERC for faster, streamlined PURPA review
- Utility trade group Edison Electric Institute (EEI) filed a motion on Monday with the Federal Energy Regulatory Commission (FERC) to collect its individual filings on modernizing the Public Utility Regulatory Policies Act (PURPA) into one docket.
- The action is meant to bring attention to the ongoing PURPA review, opened by FERC last May.
- PURPA reform is "one of our top priorities because of the impact that it's having on customers," Adam Benshoff, executive director of EEI's regulatory affairs, told Utility Dive.
PURPA is intended to drive utilities to purchase power from small renewable generators, but EEI and other utilities have long pushed for reform, arguing that the standards lead to overcharging customers above market costs.
The trade group welcomed FERC Chairman Neil Chatterjee's remarks at a January press conference that PURPA remained a priority issue to the commission, according to Benshoff. However, FERC has not set deadlines for the PURPA review and the proceeding remains in its early stages, creating uncertainty in the market.
The underlying assumption, according to Benshoff, is that "anything under 20 MW" won't have access to markets.
"We're really in a different place than we were in 1978 and in 2005 with energy markets," Benshoff said, noting the drop in clean energy costs. The lack of regulatory change requires their investor-owned utility members to pay above market value to meet PURPA obligations. According to EEI, over the next decade, Pacificorp and Duke Energy customers are expected to pay $1.2 billion and $1 billion, respectively, above market price for their energy.
"I mean the simple fact is state regulators don't have a clear answer about whether they can use a competitive solicitation model to arrive at avoided cost prices that are the basis of their PURPA obligations," Travis Kavulla, energy policy director of libertarian think tank R Street Institute, told Utility Dive.
In his former role as Montana Public Utilities commissioner, Kavulla helped co-author a National Association of Regulatory Utility Commissioners (NARUC) report on how to bring PURPA in line with energy markets. The report proposes that FERC identify the competitive practices in areas without grid operators, and utilities would voluntarily meet those practices to obtain fulfill PURPA's mandatory purchase obligations of energy from qualifying facilities (QFs) at an avoided cost.
The NARUC recommendations would allow "states to use a robust, genuinely competitive regime of solicitations to accomplish PURPA’s goals, which is to open the market to non-incumbent developers," Kavulla said.
He added that this recommendation is fair to utilities, independent developers and to the role of the states, stipulating that federal regulators are also trying to come up with an answer that balances all stakeholder interests.
"FERC has all the statutory authorities it needs to deal with this," Kavulla said.
FERC declined to comment.
"While the NARUC proposal is focused more on providing an exemption from the mandatory purchase obligation issue outside of RTOs and ISOs, to the extent the proposal seeks to allow QFs to sell their output through and establish avoided costs through a competitive pricing process, we believe this is in line with our goals," Benshoff said.
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