Thursday, February 21, 2019

FERC Lets New Mexico PURPA Ruling Stand

By Hudson Sangree

FERC declined to hear a complaint brought by a wind developer against the New Mexico Public Regulation Commission that sought to clarify when the Public Utility Regulatory Policies Act kicks in as a generation project moves forward in the development process (EL19-25).

Great Divide Wind Farm filed a petition for an enforcement action against the PRC pursuant to PURPA. The generator argued that Part 570 of the New Mexico Administrative Code, as interpreted by the commission, violated PURPA by requiring that a qualifying facility be built and ready to connect before a utility has a legally enforceable obligation to buy its power.

Great Divide said it could be difficult to obtain financing to build a project without assurances of future power purchases.

“Great Divide asserts that the effect of the New Mexico commission’s requirement is to deny Great Divide the right to the legally enforceable obligation needed to provide the certainty required to obtain the financing to construct the QFs,” FERC said.

Great Divide Wind Farm, a subisdiary of Scout Clean Energy in Boulder, Colo., is developing a wind energy project in southwestern New Mexico. | Scout Clean Energy

FERC declined to initiate an enforcement action — legally freeing Great Divide to bring a case in federal court under PURPA.

Great Divide, a subsidiary of Scout Clean Energy in Boulder, Colo., is developing two 80-MW wind projects in southern New Mexico that will eventually connect with the El Paso Electric’s grid in 2020, it said.

After self-certifying the projects as QFs in August 2018, Great Divide filed a complaint before the PRC requesting it find El Paso Electric had a legally enforceable obligation to purchase the output of Great Divide’s QFs starting in 2020.

The state commission issued a final order on Nov. 7, 2018, dismissing Great Divide’s complaint without prejudice. It found that “a legally enforceable obligation is not created in New Mexico until the QF is ready to interconnect to the utility.”

The PRC had decided a similar case, Western Water and Power Production, Limited, LLC v. Public Service Company of New Mexico, in which it had dismissed Western Water’s complaint. In that case, the PRC also said its administrative code requires a QF to show it is ready to interconnect and deliver energy before a legally enforceable obligation is created.

FERC had declined to hear that case (EL17-17), letting the PRC’s decision stand.

“The New Mexico commission … noted that its ruling was not declared by this commission to be contrary to PURPA and this commission’s regulations,” FERC said.

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