FERC recently issued an order confirming that certain qualifying facilities (“QFs”) under the Public Utility Regulatory Policies Act of 1978 (PURPA) are exempt from section 203(a)(1) of the Federal Power Act (“FPA”) pursuant to section 292.601(c) of its regulations even if the QF has a market-based rates (“MBR”) tariff and/or generator interconnection facilities. FERC’s order was issued in response to a petition for declaratory order from Chevron U.S.A. Inc. (“Chevron”), which sought clarification on account of industry uncertainty as to whether section 203 approval is required for dispositions of QFs with MBR authority. FERC’s regulations clearly exempt small power production QFs 30 MWs or smaller and cogeneration QFs of any size from most sections of the FPA, including section 203. Nevertheless, QFs with MBR tariffs and related agreements, generator interconnection facilities, and associated books and records have filed section 203 applications out of an abundance of caution as to whether FERC jurisdiction under section 203 attached to these otherwise jurisdictional assets.
In granting Chevron’s declaratory order, FERC stated that QFs are exempt from section 203 even if the QF has MBR authority and/or owns generator interconnection facilities based on the plain language of section 292.601(c) which is “straight-forward, and on its face exempts the vast majority of QFs from FPA section 203(a)(1).” However, FERC underscored that if a public utility would otherwise be jurisdictional because of its ownership or operation of facilities other than those considered part of the QF (as defined and described in section 292.101(b)(1)), the public utility would be subject to section 203 and required to report its QF assets along with its jurisdictional facilities in its section 203 application.
FERC’s order concluded with a reminder that QFs that dispose of their MBR authorization must file a cancelation of their MBR authority following the transaction along with a notice of change in status in accordance with the regulations.
This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney.
This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary.
The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites.
In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.