20160912_5067.pdf

DECISION MEMORANDUM
TO: COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
FROM: KARL KLEIN
DAPHNE HUANG
DEPUTY ATTORNEYS GENERAL
DATE: SEPTEMBER 9, 2016
SUBJECT: FERC’S NOTICE INVITING POST-TECHNICAL CONFERENCE
COMMENTS, FERC DOCKET NO. AD16-16-000
On September 6, 2016, the Federal Energy Regulatory Commission (FERC) issued a Notice
inviting comments in follow-up to the June 29, 2016 Technical Conference on implementation issues
related to the Public Utility Regulatory Policies Act (PURPA), at which Commissioners Kjellander
and Raper were panelists. The Notice specifically requests comments on two matters:
(1) the use of the “one-mile rule” to determine the size of an entity seeking
certification as a small power production qualifying facility (QF); and
(2) minimum standards for PURPA-purchase contracts.
The Notice, attached hereto, sets a deadline of November 7, 2016, for comments.
RECOMMENDATION
If the Commission decides to respond to the Notice, Staff suggests that the Commission
appoint one Commissioner to work with Staff and Legal in preparing draft comments for the
Commission’s review at a later meeting. The draft can be reviewed and discussed in executive
session, if necessary.
COMMISSION DECISION
1. Does the Commission wish to: appoint one Commissioner to work with Staff and
Legal in preparing draft comments in response to FERC’s Notice, for the Commission’s review at a
later meeting?
2. Which Commissioner, if any, should work with Staff and Counsel to draft the
comments?
Karl Klein
Karl Klein
Daphne Huang
Deputy Attorneys General
M:AD16-16-000_kk_djh
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Implementation Issues Under the Public Utility
Regulatory Policies Act of 1978
Docket No.AD16-16-000
NOTICE INVITING POST-TECHNICAL CONFERENCE COMMENTS
(September 6, 2016)
On June 29, 2016, Federal Energy Regulatory Commission (Commission) staff
conducted a technical conference to discuss implementation issues related to the Public
Utility Regulatory Policies Act of 1978 (PURPA).1 The Commission invites post-
technical conference comments on the following two matters: (1) the use of the “one-mile
rule” to determine the size of an entity seeking certification as a small power production
qualifying facility (QF); and (2) minimum standards for PURPA-purchase contracts.
All interested persons are invited to file post-technical conference comments on
these two matters, including the questions listed in the attachment to this Notice.
Commenters need not respond to all questions asked. Commenters may reference
material previously filed in this docket, including the technical conference transcript, but
are encouraged to submit new or additional information rather than reiterate information
that is already in the record. In particular, Commenters are encouraged, when possible, to
provide examples in support of their answers. These comments are due on or before
November 7, 2016.
For further information about this Notice, please contact:
Adam Alvarez (Technical Information)
Office of Energy Market Regulation
Federal Energy Regulatory Commission
888 First Street, N.E.
Washington, DC 20426
[phone]
[e-mail]
1 16 U.S.C. § 2601 et seq.(2012).
20160906-3014 FERC PDF (Unofficial) 09/06/2016
Docket No. AD16-16-000 - 2 -
Loni Silva (Legal Information)
Office of General Counsel
Federal Energy Regulatory Commission
888 First Street, N.E.
Washington, DC 20426
[phone]
[e-mail]
Kimberly D. Bose,
Secretary.
20160906-3014 FERC PDF (Unofficial) 09/06/2016
Post-Technical Conference Questions for Comment
One-Mile Rule:
PURPA defines a small power production facility as “a facility which is an
eligible solar, wind, waste, or geothermal facility, or a facility which (i) produces electric
energy solely by the use, as a primary energy source, of biomass, waste, renewable
resources, geothermal resources, or any combination thereof; and (ii) has a power
production capacity which, together with any other facilities located at the same site (as
determined by the Commission),is not greater than 80 megawatts.”2
Section 292.204(a) of the Commission’s regulations states that small power
production facilities are considered to be at the same site if they are located within one
mile of each other, share the same energy resource, and are owned by the same person(s)
or its affiliates.3 This is commonly referred to as “the one-mile rule.”
1. Should the presumption inherent in the one-mile rule be made rebuttable? If so,
who should benefit from the presumption and who should bear the burden of
overcoming the presumption; i.e., should the interconnecting utility or the QF be
required to rebut the presumption?
2. Alternatively, should the Commission consider modifying the rule to either require
projects seeking QF status to be spaced further apart or allowed to be closer
together?
3.Should the Commission consider a more fact-based analysis based on the criteria
proposed by Edison Electric Institute (EEI)4 and Idaho Commissioner Kjellander,5
or some other criteria?
Minimum Standards for PURPA-Purchase Contracts:
In section 210 of PURPA, the Commission was tasked with prescribing and from
time to time revising such rules as it determines necessary to encourage cogeneration and
small power production.6 The Commission’s regulations require each electric utility to
2 16 U.S.C. § 796(17)(A) (2012) (emphasis added).
3 18 C.F.R. § 292.204(a) (2015).
4 See Joel Schmidt, on behalf of EEI Submittal at 4.
5 See Idaho Commissioner Paul Kjellander Submittal at 6-7.
6 16 U.S.C. § 824a-3(a) (2012).
20160906-3014 FERC PDF (Unofficial) 09/06/2016
Docket No. AD16-16-000 - 2 -
provide standard rates for QFs with a design capacity of 100 kW or less and permit such
rates for QFs with a design capacity above 100kW.7 The Commission has not required
any particular minimum contract length or other minimum contract provisions in
PURPA-purchase contracts.
1. What is an appropriate minimum length of a PURPA-purchase contract, and are
there other minimum contract terms and conditions that a developer needs to
secure financing?
2.How would establishing a required minimum contract length or other required
contract terms and conditions affect QF development?
3. Should the size threshold for requiring standard rates be changed, and, if so, to
what?
4.Section 292.302 of the Commission’s regulations8 requires electric utilities to
provide five and ten years of cost data to state regulatory agencies, and certain
small electric utilities are required to provide data to enable QFs to estimate the
avoided costs. Section 292.304(e) identifies this data, and state review of such
data, as one factor to be used in determining avoided cost rates for QF purchases.
To what extent is the data currently being provided? To what extent is this data
taken into account and/or is helpful in calculating avoided cost rates?
7 18 C.F.R. § 292.304(c) (2015).
20160906-3014 FERC PDF (Unofficial) 09/06/2016