FERC Declines to Respond to PURPA Petition for California Rooftop Solar Systems | Troutman pepper

[co-author: Juan Dawson]

On October 25, 2022, FERC declined to respond to an enforcement motion against California’s solar array regulations implemented under the Public Utility Regulatory Policies Act (“PURPA”). As a result, ongoing federal litigation against California regulations continues.

The litigation, which dates back to 2011 in the US District Court for the Central District of California, focuses on avoided cost fees that small renewable power producers, including residential solar systems, can receive under PURPA. Under PURPA, incumbent electric utilities are required to purchase electricity from qualifying facilities of 80 MW or less at rates that they would have charged for their own generation (referred to as “avoided cost” rates). Currently, the California Public Utilities Commission (“CPUC”) net metering rules allow companies to use their own utility-supplied meters to offset their retail consumption against the wholesale production of a solar array. One advocacy group, Californians for Renewable Energy (“CARE”), has claimed that CPUC’s net metering rules, among other things, allow retail customers to use utility-provided meters to offset their retail consumption against the generation of a solar array, thereby reducing the Compensation is reduced on rooftop solar generators from investor-owned utilities. The CARE litigants attempted to amend their federal complaint, but first had to apply to FERC for relief under PURPA. The CARE petitioners did so on August 26, 2022.

In its August petition, CARE argued that by CPUC’s implementation of its net metering rules, CPUC and California’s investor-owned utilities violated the avoided costs requirement of PURPA. In its statement of intention not to act, FERC stated that the “decision not to pursue an enforcement action means that petitioners may themselves bring an enforcement action against the California Commission in the competent court.” Accordingly, the notice will allow CARE and the other members to further amend their complaint and proceed with the ongoing federal proceeding in California.

The CARE litigation is CARE et al. v. CPUC et al. (Case No. 2:11-cv-04975-JWH) in the United States District Court for the Central District of California.

A copy of the FERC notice can be found here.

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