On February 24, 2014, the Oregon Public Utility Commission (Oregon Commission) issued an order in the first part of its investigation into its policies related to contracting and pricing under the Oregon and federal Public Utility Regulatory Policies Act (PURPA). The Oregon Commission maintained most of its existing policies; however, it made a number of modifications that could impact the development of small power production facilities. The order completes the first phase of its comprehensive investigation, and the Commission will consider a number of other critical PURPA-related issues in a second phase in 2015.
The Oregon Commission has the responsibility for implementing the details of PURPA in a manner consistent with the rules and policies adopted by the Federal Energy Regulatory Commission (FERC). PURPA was passed by Congress in 1978 to promote the development of cogeneration and small renewable energy projects to reduce our nation’s dependence on fossil fuels. PURPA imposes a requirement that electric utilities purchase power from these small generation projects, called qualifying facilities (QFs). Despite this requirement, state policies have a tremendous impact on promoting or discouraging the development of renewable resources under PURPA.
The Oregon Commission’s order maintained many of its important PURPA policies. The Commission maintained the 10 megawatt (MW) size threshold for QFs that are eligible to sell power to electric utilities under standard power purchase agreements and avoided cost rates. QFs above the 10 MW size threshold will continue to be required to negotiate all terms, conditions, and prices based on Commission approved guidelines; however, the Commission will consider revising these guidelines in phase two of the case. The Oregon Commission also maintained its policies that allow QFs to enter into standard contracts with a term up to 20 years, and to keep their renewable energy certificates. The Commission also reaffirmed its requirement that PacifiCorp and Portland General Electric Company offer to pay different renewable avoided cost rates to certain eligible renewable resources.
While the Oregon Commission maintained many of its PURPA policies, a number of key changes were made. Some of the most important changes include the adoption of wind integration charges for wind QFs, requiring that avoided cost rate changes be filed on an annual basis, adjusting the avoided cost rates for the capacity value provided by QFs, and requiring Idaho Power Company to use Oregon’s rather than Idaho’s methodology for setting avoided cost rates.
OPUC PURPA Order can be found HERE
Disclaimer
These materials are intended to as informational and are not to be considered legal advice or legal opinion, nor do they create a lawyer-client relationship. Information included about previous case results does not assure a similar future result.
