Republican FERC Commissioners James Danly and Mark Christie issued a partial dissent in an otherwise typical PURPA order Friday, criticizing the Democratic majority for making “unnecessary” declarations on the case.
All five commissioners agreed to not act on a qualifying facility’s petition to enforce a contract between it and the South Carolina Public Service Authority (Santee Cooper), a decision allowing the QF to sue the state-owned utility under the Public Utility Regulatory Policies Act (EL22-29, QF15-850-003).
National Renewable Energy Corp.’s Magnolia Solar negotiated a power purchase agreement under which Santee Cooper would pay an avoided-cost rate, as required by PURPA, for five years for the output of its 42-MW solar project in Orangeburg County.
The dispute arose when Magnolia revised the draft PPA to a 20-year term.
In protest, Santee Cooper argued that “no LEO [legally enforceable obligation] was formed because Magnolia refused to accept Santee Cooper’s five-year term for the LEO, a term that Santee Cooper is entitled to set as a condition.”
FERC’s majority sided with the developer, declaring that “whether a LEO was established depends on the QF’s commitment to sell its output to the utility and not the utility’s actions.
“Magnolia’s demonstrated commitment to develop the QF, and expressed intent to sell its net output to Santee Cooper at an avoided-cost rate, supports the finding that a LEO was formed,” FERC said. “Santee Cooper’s insistence that Magnolia agree to a five-year term as condition precedent to establishing a LEO is inconsistent with commission precedent.”
Such decisions not to act are common.
“FERC typically declines to initiate enforcement actions requested by QFs,” Bracewell wrote in a 2018 blog post. “Instead, if FERC believes such petitions merit discussion, FERC’s practice is to issue a Notice of Intent not to Act and a declaratory order setting forth its position on the issues raised in the petition.”
Such declarations are unnecessary, Danly and Christie said in separate but similar partial dissents.
The Republicans — especially Danly — have been vocal since the beginning of their tenure about the commission being too proactive, preferring that it take a hands-off approach and letting Congress decide matters of policy. In this case, the two said the majority’s statements were superfluous because the commission took no action for which it needed to explain itself.
“While the commission may offer unnecessary declarations on any subject it chooses, I do not believe it should,” Danly wrote. “Responsible adjudication counsels minimalism, and the commission should be more circumspect.”
In a footnote, Danly listed other Notices of Intent not to Act in which “the commission has properly declined to include unnecessary declarations.”
“The declarations in this order will not aid the petitioner in court,” he wrote. “Should an action be initiated, the court has processes by which to adduce evidence; the law has not been changed or clarified by any of the order’s unnecessary declarations; and the precondition for initiating such a proceeding was fully consummated by the Notice of Intent not to Act.”