Yesterday Vote Solar announced that it has petitioned the Federal Energy Regulatory Commission (FERC) to restore implementation in Montana of a 1978 federal law that requires utilities to purchase electricity from solar generation and other independent power producers.
In June the Montana State Public Service Commission suspended implementation of the Public Utility Regulatory Policies Act (PURPA) in the service area of Northwestern Energy, after the utility argued that the calculation of rates set to producers was too high.
At issue are 155 MW of solar projects from 100 kW to 3 MW in capacity that are planned, which Northwestern Energy says would put undue pressure on rates. The price paid for PURPA-compliant facilities in the utility’s service area is currently set at $0.067 per kilowatt-hour (kWh), well below average retail electricity rates in the Montana which are at $0.116/kWh.
Northwestern Energy serves 650,000 customers in Montana, South Dakota and Nebraska.
Vote Solar and the Montana Environmental Information Center argued against the June decision, but despite the 3-2 ruling both a request for re-hearing and a motion for reconsideration were denied. Yesterday the organizations, represented by EarthJustice, are taking the matter to FERC.
“We don’t think they have a legal basis to suspend it,” Vote Solar Managing Director of the Regulatory Team Ed Smeloff told pv magazine. He also notes that there was no opportunity to provide evidence in an earlier hearing. “You can’t just suspend arbitrarily a qualifying facilities tariff.”
Montana’s ruling comes as PURPA is being used more and more widely by solar developers, particularly in states that have no or weak renewable energy mandates. And while North Carolina has seen the highest capacity of PURPA solar capacity to date by far, the law has also been used for hundreds of megawatts of solar projects in Utah and Idaho, which prior to this had virtually no market for utility-scale solar.
However, in the summer of 2015 regulators in Idaho limited PURPA contract lengths to only two years, and Vote Solar says that utility Duke Energy is trying to come up with reasons why PURPA contracts shouldn’t be enacted or supported.
As a result the law is under threat in some of its most promising markets, and Vote Solar says that it believes that its case before FERC could have impacts beyond Montana. “It would give pause to any other state commission that would try to do the same thing,” says Smeloff.
Correction: This article was corrected on September 21 at 10:55 AM EST. A previous version of this article indicated that Idaho’s change to its PURPA contract lengths occurred this summer, when in fact the change took place during the summer of 2015. We regret the error – CR.
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