From Troutman Sanders LLP
On March 3, 2016, FERC issued an order denying a complaint filed by PáTu Wind Farm, LLC (“PáTu”)—a 9 MW qualifying facility (“QF”) under the Public Utility Regulatory Policies Act of 1978 (“PURPA”). The complaint alleged that Portland General Electric Company (“Portland General”) was required to set up a pseudo-tie so that PáTu could dynamically schedule its entire net output to Portland General.
In a prior proceeding, FERC granted in part PáTu’s complaint and directed Portland General to accept the entire net output of the facility that is delivered to Portland General’s balancing authority area. In the instant proceeding, PáTu sought to enforce FERC’s prior ruling and claimed that it was delivering its output to Portland General via 15-minute scheduling, which precluded PáTu from delivering its entire net output. PáTu alleged that dynamic scheduling was the only form of scheduling that would allow it to deliver the entire net output to Portland General, while also relieving PáTu of the obligation to pay the Bonneville Power Administration (“BPA”) for wind integration services.
However, BPA—as the intervening transmission system required to wheel the PáTu output to Portland General’s system—required installation of a pseudo-tie at PáTu’s facility site in order to allow for dynamic scheduling. Portland General refused to allow a pseudo-tie, which PáTu claimed violated the Commission’s findings in its prior complaint order. As a result, PáTu alleged it was forced to pay BPA wind integration charges, which PáTu claimed resulted in it receiving less than the full avoided cost rates for its output, as required by PURPA. For the portion of the net output not able to be delivered to Portland General’s system, Portland General compensated PáTu for that unscheduled net output.
FERC denied PáTu’s complaint and declined to require Portland General to establish a pseudo-tie with PáTu. In its order, FERC stated, “[n]either PURPA nor the Commission’s regulations require a purchasing utility, on the facts presented here, to establish a pseudo-tie with an off-system QF.” Further, FERC held that the cost of wind integration services are part of the costs PáTu incurs to deliver its output over BPA’s system to Portland General, and do not result in PáTu receiving less than the full avoided cost rate from Portland General for its entire net output.
A copy of FERC’s order can be found here.